Sears sales fall sharply in 2Q as it spins off real estate
Hoffman Estates-based Sears Holdings Corp. says a key sales figure fell sharply in the second quarter, particularly dragged down by weakness at its namesake stores. It's at least the 10th straight quarter that the metric has declined.
The operator of Sears and Kmart stores said that sales at stores open at least a year dropped 10.6 percent for the quarter to date. This figure is considered an important measurement of a retailer's operating performance because it excludes results from stores recently opened or closed.
The retailer also said it expected that proceeds from the spinoff of some of its real estate will lead it to report a second-quarter profit of between $155 million and $205 million, which has also helped shore up its cash position. Investors sent Sears' stock up $1.38, or 6.5 percent, to $22.93 in premarket trading.
At Sears stores, the metric declined 13.9 percent. It fell 6.9 percent for Kmart locations.
The company said Monday that soft consumer electronics sales hindered its performance. Excluding that business, sales at stores open at least a year fell 9.1 percent, with a 5.4 percent decline at Kmart stores and a 12.5 percent drop at Sears locations.
Sears Holdings also announced the extension of a $3.28 billion credit line. The company said the credit line, along with $2.7 billion in proceeds from the sale of more than 200 properties to a real estate investment trust it spun off, gives it more financial flexibility.
Sears plans to report its second-quarter financial results on Aug. 20.