Better comparable-store sales weren’t enough to overcome higher costs and margin pressures at Sears Holding Corp., which registered a 38.5 percent drop in first-quarter profits.
Net income attributable to the Hoffman Estates, Ill.-based firm fell to $16 million, or 14 cents a diluted share, from $26 million, or 21 cents, a year earlier.Adjusted earnings of 16 cents a share came in 2 cents ahead of Wall Street projections.
Revenues for the three months ended May 1 slipped 0.1 percent to $10.05 billion from $10.06 billion. U.S. comparable-store sales rose 1.2 percent at the Sears division—its first quarterly rise in several years. The Kmart unit comped up 1.7 percent with strength in apparel, home goods and toys.
“Our Kmart format performed very well during the quarter, achieving margin rate improvement on top of its increase in sales and nearly doubling its adjusted [earnings before interest, taxes, depreciation and amortization],” said W. Bruce Johnson, the firm’s interim chief executive officer and president.
The profit margin rate at Sears’ U.S. stores fell to 30.3 percent from 31.4 percent a year earlier.
For complete coverage, see Friday’s issue of WWD.