Sears Canada Loss Widens, Revenues Sink
by The Daily Lede
TORONTO– Sears Canada Inc.’s first-quarter loss more than doubled from a year earlier and revenue and same-store sales sank, as the retailer dealt with stiff competition, store-closure costs and an extended winter.
The results come just a week after the company’s U.S.-based parent, Sears Holdings Corp., said it is considering selling its controlling stake in Sears Canada as it seeks to raise cash and focus on its home operations.
Sears Canada said Wednesday it posted a first-quarter loss of 75.2 million Canadian dollars ($69 million), or 74 Canadian cents a share, compared with a loss of C$31.2 million, or 31 Canadian cents, a year earlier.
Results in the latest quarter included C$7.6 million of charges related largely to severance costs, plus lease exit costs and other items totaling C$11.2 million.
Revenue for the quarter ended May 3 fell 11% to C$771.7 million and same-store sales dropped 7.6%.
“Sales of spring merchandise were below last year, as winterlike weather was prevalent in most parts of the country well into the new season with cooler temperatures and significantly more snow in many areas,” Douglas C. Campbell, Sears Canada’s chief executive, said in a statement.
Sears Canada, squeezed by competition from big-box, discount retailers and specialty retailers, and the Canadian debut of Target Corp., has cut 2,600 jobs since the beginning of last year and sold a number of store leases and stores.
The retailer has been exiting some of its high-profile locations, including its flagship site in downtown Toronto and other locations sites the country, as part of a long-term plan to reposition itself in the competitive Canadian retail landscape. In November, it said it would sell its 50% stake in eight Canadian properties for C$315 million.
Sears Holdings, which owns 51% of Sears Canada, is scheduled to report first-quarter results Thursday.
(END) Dow Jones Newswires 05-21-14 0849ET Copyright (c) 2014 Dow Jones & Company, Inc.