By  on February 28, 2013

Sears Holdings Corp. and Kohl’s Corp. both posted fourth-quarter results Thursday, with the former narrowing its loss and the latter hurt by slower sales early in the quarter.

At Sears, the company showed improved quarterly results by narrowing its loss to $489 million, or $4.61 a diluted share, for the period ended Feb. 2, from the loss of $2.4 billion, or $22.63, a year ago. Revenues fell 1.8 percent to $12.26 billion from $12.48 billion. Comparable-store sales at the Kmart nameplate fell 3.7 percent, while comps at domestic Sears stores rose 0.8 percent. Comps at the Sears Canada operation decreased 3.8 percent. For the year, the loss narrowed to $930 million, or $8.78 a diluted share, on a 4.1 percent decrease in net revenues to $39.85 billion.

Edward S. Lampert, Sears Holdings’ chairman and chief executive officer, said in his annual letter to shareholders that Sears Holdings made progress in 2012 but there’s more work to be done this year.

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“Sears Holdings is becoming a membership company,” Lampert wrote, saying that the transformation that began three years ago with the Shop Your Way loyalty program includes a social commerce platform and allows shoppers to shop in the stores and online and win products and points.

He added that the company has invested significantly in its online e-commerce platforms, which has helped boost the Shop Your Way membership program and helped “drive over 50 percent of revenues at domestic Sears stores and at Kmart.”

Sears has also added mobile checkout at many stores, as well as rolled out tablets and mobile devices in 2012 to allow store associates to provide a better shopping experience, such as search for inventory that’s not in a particular store.

He noted that both the Sears and Kmart apparel businesses improved in 2012, helped by declining cotton prices and better inventory management. In addition, two new apparel lines, with Nicki Minaj and Adam Levine, will be part of the Shop Your Way program at Sears.

He pointed to the changes in the retail landscape, such as new ceos at J.C. Penney Co. Inc., Staples Inc. and Best Buy Co. Inc., stating, “I believe we are seeing an enormous shift in the type of talent that will be running retail enterprises in the future, similar to the shift that Google brought to the advertising business,” noting that Sears Holdings was early in changes it saw on the talent front and that the turnover experienced “is a product of this change.”

Separately, Sears’ chief financial officer, Rob Schriesheim, said the firm expects to “generate at least $500 million of additional liquidity” after it monetizes assets over the next 12 months. The company owns unencumbered real estate assets, as well as Lands’ End and Sears Canada.

At Kohl’s, net income for the three months ended Feb. 2 fell 16.9 percent to $378 million, or $1.66 a diluted share, from $455 million, or $1.81, a year ago. Sales rose 5.4 percent to $6.34 billion from $6.02 billion, with comp sales up 1.9 percent. For the year, net income was down 16.7 percent to $1 billion, or $4.17 a diluted share, on a sales gain of 2.5 percent to $19.28 billion.

Kevin Mansell, Kohl’s chairman, president and ceo, said, “Sales for the fourth quarter developed very late and, as a result, came at a cost to profitability.”

In response to a question during a conference call to Wall Street, Mansell said the chain doesn’t need to become more promotional just because its competitor J.C. Penney is tweaking its plan and bringing back promotions.

He also told analysts that “women’s and men’s apparel were both above the company average for the quarter,” with active apparel in women’s the strongest category with an increase in the high teens. The junior business continues to be challenging, and accessories was the only line that did not post a positive comp for the quarter.

E-commerce sales have an annual growth rate of more than 50 percent, and all stores are now Wi-Fi-enabled. Mansell said Kohl’s will pilot mobile point of sale in the third quarter. The company also tested a loyalty program in 100 stores during the quarter for shoppers who don’t qualify for a Kohl’s credit card or just prefer not to pay by credit, and plans to roll out the program to more stores this spring.

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