In what feels like yet another “Groundhog Day” moment for the retailer, Sears Holdings is closing 28 more Kmart stores. Sears revealed the closures in its Q2 earnings report, which showed that the retailer’s year-over-year revenue dipped from $5.66 billion to $4.37 billion.
Sears attributed store closures to $770 million of its sales decline. Since the start of its 2017 fiscal year in February, Sears has closed approximately 180 stores. By the end of Q3, Sears expects to close an additional 150 stores (not counting the 28 Kmart stores).
Comparable store sales at Sears and Kmart declined 11.5% during Q2, much worse than the expected 7.1% decline. Kmart comparable store sales decreased 9.4% overall, with a 6.8% decline when consumer electronics and pharmacy categories are excluded. Sears’ comparable store sales declined 13.2%, with a 12.1% decline excluding the consumer electronics category.
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In the quarter, net loss attributable to Sears actually narrowed from $395 million, or $3.70 per share, to $251 million, or $2.34 per share. Excluding one-time charges, the retailer lost $1.16 a share. But the significant losses are still a massive hurdle for a company that hasn’t provided any signs that a turnaround is looming.
Sears has saved approximately $1.25 billion through its ongoing restructuring program, which includes:
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Simplification of the Sears Holdings organizational structure;
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Streamlining of operations;
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Reducing unprofitable categories; and
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Closing underperforming stores.
The program is designed to improve liquidity for Sears and reduce long-term debt. As of July 29, Sears had $442 million in cash on hand — well above the $286 million it had in January 2017 — and $191 million still available to borrow from its $1.5 billion credit facility. Sears also reduced its long-term debt, from $4.2 billion at the end of Q4 2016 to $3.5 billion at the end of Q2 2017.
