Sears Hometown 2Q income falls 54 percent
Sears Hometown and Outlet Stores reported a second quarter 2013 operation income loss of 54 percent despite a an increase in sales for the period.
Operating income decreased $15.4 million during the quarter, compared to $33.7 million in the prior year's period. Net income to stockholders decreased 57 percent to $9.1 million, or 40 cents per diluted share, compared to $21.1 million, or 91 cents per diluted share, in the prior year.
The losses were realized despite a 1.4 percent increase in comparable store sales over the prior year, resulting in a 1.9 percent net sales growth.
Bruce Johnson, Chief Executive Officer and President of the Hoffman Estates-based commpany, said stores saw increased sales in most categories, including double-digit growth in lawn and garden and growth in comparable store sales in home appliances. However. margins declined "primarily due to an unfavorable product mix in Outlet, our response to an increasingly competitive appliance retail landscape, and lower initial franchise revenues.
"We are adjusting pricing/promotional plans, enhancing Outlet sourcing capabilities, and focusing on higher margin categories and product lines to improve profitability," Johnson said. "Profitability was also affected by $6.4 million of expenses incurred as a result of operating as an independent public company, which expenses were not incurred in the prior year."
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