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Sears Hometown and Outlet Stores, Inc. - newly separated from Sears Holdings Corp. - reported third quarter operating income was up 27% to $14.1 million, compared to $11.1 million in the third quarter of the prior fiscal year.
Net income attributable to stockholders increased 29% to $8.8 million, from $6.8 million in the prior year. Adjusted EBITDA increased 19% to $16.4 million, compared to $13.8 million in the prior year.
Comparable store sales in 3Q 2012 increased 3.1% over the prior year's third quarter.
Year-to-date, net income doubled to $50.4 million, from $25.2 million in the first three quarters of fiscal 2011. Adjusted EBITDA increased 64% to $89.9 million, from $54.9 million in the prior year, on a 4.0% increase in overall sales.
"In the third quarter, we completed our separation from Sears Holdings Corporation, added nine net stores, and delivered improved year-on-year operating results," said President and CEO Bruce Johnson.
The company operates through two segments: the Sears Hometown and Hardware segment and the Sears Outlet segment.
Net sales in the 3Q 2012 increased $17.9 million, or 3.3%, to $556.9 million, from 3Q 2011. The increase was driven primarily by the 3.1% increase in comparable store sales, but sales growth was also boosted by new Outlet stores, apparel liquidation revenues, and delivery revenues.
The comparable store sales increase of 3.1% came from a 4.4% increase in Hometown and a 0.8% decrease in Outlet.
The 3.1% increase was primarily driven by higher sales of home appliances in Hometown due to pricing, promotion, and margin optimization strategies, and improved assortments.
Also contributing to the increase in comparable store sales were increased sales of tools and mattresses in both Hometown and Outlet that resulted from assortment expansion in those categories.
Partially offsetting these increases were declines in lawn and garden due to drought conditions experienced in large portions of the U.S. and in consumer electronics resulting from our strategy to de-emphasize the category.
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