Sears Hometown and Outlet Stores sales down 0.9%Staff Writer | September 7, 2017
Sears Hometown and Outlet Stores reported results for the quarter ended July 29, 2017.
Sears Hometown and Outlet Stores Net sales decreased $66.4 million
Outlet comparable store sales declined 5.0% in the second quarter of 2017.
Home appliances had negative comparable store sales comparisons but improved its performance against the first quarter of this year.
Net sales in the second quarter of 2017 decreased $66.4 million to $490.0 million, or 11.9%, from the second quarter of 2016.
This decrease was driven primarily by the impact of closed stores (net of new store openings) and a 2.1% decrease in comparable store sales.
Comparable store sales were down 0.9% and 5.0% in Hometown and Outlet, respectively.
Gross margin was $92.3 million, or 18.8% of net sales, in the second quarter of 2017 compared to $114.9 million, or 20.6% of net sales, in the second quarter of 2016.
The decrease in gross margin rate was primarily driven by $11.2 million of store closing costs, partially offset by a $1.7 million physical inventory gain in Outlet.
The combined impact of store closing costs and shrink on the gross margin rate was a reduction of 233 basis points in the second quarter of 2017 and a reduction of 32 basis points in the second quarter of 2016.
Selling and administrative expenses decreased to $115.2 million, or 23.5% of net sales, in the second quarter of 2017 from $118.8 million, or 21.4% of net sales, in the prior-year comparable quarter.
In the second quarter of 2017 the company incurred charges of $12.6 million of which $2.4 million were non-cash for the previously announced accelerated store-closing initiative and non-cash charges of $5.6 million related to the write-off of, and additional reserves taken on, franchisee notes receivable.
In addition, IT infrastructure investments increased $5.2 million to $8.5 million in the second quarter of 2017 compared to $3.3 million in the second quarter of 2016.
In the second quarter of 2016, the company recognized a $25.3 million gain related to the sale of an owned property located in San Leandro, California. ■