Lack of Appliance Stimulus Pushes Sears Results Lower vs. 2010
May 19, 2011
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The lack of an appliance stimulus program was one of the reasons Sears said its first quarter 2011 results were lower than first quarter 2010, but the retailer also came up short in "executing with excellence," according to its CEO.
Sears Holdings Corp. reported a first quarter 2011 net loss of $170 million compared to net income of $16 million in the first quarter of 2010. Sears reported adjusted EBITDA for the quarter of $63 million ($78 million domestic and -$15 million for Sears Canada), compared to $304 million in 2010. Sears said the results were within its previously announced expectations.
"Our first quarter was adversely impacted by unfavorable weather, economic pressures facing our customers, and comparisons to last year's government-sponsored stimulus program relating to the purchase of appliances," said Lou D'Ambrosio, Sears Holdings' CEO and president.
"However," D'Ambrosio said, "we also fell short on executing with excellence. We cannot control the weather or economy or government spending. But we can control how we execute and leverage the potent set of assets we have. We are taking actions intended to leverage our suite of assets, including extending our leadership position in appliances, capitalizing on the scope of our portfolio and marquee brands such as Kenmore, Craftsman, DieHard, and Lands' End, extending our lead in home services, revitalizing our Sears' apparel business and delivering an extraordinary customer experience at the store, online and in home. Everything will begin and end with the customer experience. These actions will be complemented with effective expense management and operational excellence."
Total revenues were down $341 million, to $9.7 billion, for the quarter ended April 30, 2011, as compared to total revenues of $10.0 billion for the quarter ended May 1, 2010. Sears saw a 3.6% decrease in domestic comparable store sales; it also had and having fewer Kmart and Sears full-line stores in operation. It also saw a 9.2% decline in comparable store sales at Sears Canada.
Decreases in sales for the quarter at Sears Domestic were primarily driven by the appliance, apparel, and consumer electronics categories.
Appliances experienced a low double-digit decline and benefited in the prior year from the Cash for Appliances rebate programs.
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