Sears Canada loses $119M in Q3 as same-store sales slide
Sears Canada Inc. continued its string of disappointing earnings, losing $118.7 million in its fiscal third quarter.
Same-store sales and total revenue for the 13-weeks ended Nov. 1 dropped to $834.5 million from $982.3 million, partly as a result of store closures last year.
The troubled retailer also saw sales at locations that remained open drop by 9.5 per cent from last year.
The net loss for the quarter was $1.16 per share, more than double the 2013 third-quarter net loss of $48.8 million or 48 cents per share.
On an adjusted basis, Sears Canada had a $19.4 million loss in this year's third quarter compared with $7.3 million of earnings before interest, taxes, depreciation and amortization (EBITDA).
On Monday, the retailer said it would end its Sears credit card agreement with JPMorgan and it was seeking a new credit card partner.
Despite selling off some of its prime retail locations in Canada and watching sales slide for years amid competition from discount competitors and others, Sears Canada insists it still has a future.
Acting CEO Ronald Boire said the third-quarter results were disappointing but the Sears Canada still has a niche in the market providing "great fashionable product made of high quality at affordable prices."
"The company has done well at managing expenses year to date and maintaining a strong balance sheet, and we are now working at growing our top line to have our sales match the high level of loyalty and support that Canadians have for the Sears brand," Biore said in a statement.
Expenses related to Sears Canada’s multi-year "transformation" effort fell this quarter to $4 million, compared with $20.2 million in the 2013 third quarter.
The loss included a $44.4 million pre-tax impairment charge and a $43.7 million income tax expense.
Hedge fund manager Eddie Lampert, who controls Sears Holdings and Kmart in the U.S., now has majority ownership in Sears Canada after buying out the U.S. parent’s stake.
He has been criticized for sucking cash out of the retailer, instead of re-investing to keep the retailer current.
“Somewhere along the line [Sears Canada] got disconnected from the volume consumer and as soon as you get disconnected you lose your place in the market,” Mandeep Malik of the DeGroote School of Business told CBC News.
