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A sign announcing the store will be closing hangs above a Sears store in Chicago, Illinois.
Sears Holdings on Thursday reported the smallest decline in quarterly same-store sales in more than three years, as the embattled department store chain continues to trim its fleet of stores and aims to get back to profitability.
Sales at Sears and Kmart stores open for at least 12 months were down 3.9 percent during the second quarter, compared with a decline of 11.9 percent in the prior period. The 3.9 percent drop included a same-store sales decline of 3.7 percent at Kmart stores and a 4 percent decline at Sears stores. The company also said it saw positive comparable sales growth of 3 percent in July and 2.5 percent in August.
Its shares, which are heavily shorted, were up as much as 22 percent in after-hours trading on the news.
“We have worked hard to make the best possible decisions for the Company given the options available to it and the variety of constraints it has faced,” CEO Eddie Lampert said in a blog post. “We continue to believe that Sears can successfully evolve into a smaller but profitable company. … This can only happen with the cooperation of our various stakeholders and with the monetization of further assets that can be reinvigorated independently and without the financial constraints of Sears Holdings.”
Though total revenue still fell during the quarter by a double-digit percentage, Lampert continues to tout the retailer’s progress as it makes moves like opening small-format stores and has started selling some of its brands on Amazon. But key to the CEO’s vision for Sears is getting a deal done with his hedge fund, ESL Investments.
The company has been evaluating a bid from ESL to buy parts of Sears Holdings. ESL most recently offered to buy the troubled retailer’s Kenmore appliance division for $400 million. There’s also an offer on the table for the fund to buy Sears’ Home Improvement business for as much as $80 million in cash. A special committee has been reviewing the deal, and Sears said Thursday that it continues to do so. The retailer wouldn’t comment further about and progress that’s been made.
Lampert had said in May about getting this deal done that “speed and certainty here are critical” to meet Sears’ “liquidity needs.”
Total revenue was down more than 25 percent during the second quarter, as Sears continues to suffer from falling foot traffic to its stores at shopping malls across the U.S. Sales dropped to $3.18 billion from $4.28 billion a year earlier, while the company said ongoing store closures “were again a major contributor to the year-over-year decline.”
