RSS   Newsletter   Contact   Advertise with us
Post Online Media
Post Online Media Magazine

Sears: Sales down, gross margin down, operating loss increased

Share on Twitter Share on LinkedIn
Christian Fernsby |
Sears Hometown
Sears Hometown and Outlet Stores   Hometown segment and Outlet segment comparable store sales declined 13.2% and 2.

Sears Hometown and Outlet Stores reported results for the first quarter ended May 4, 2019.

Consolidated comparable store sales were down 8.9% in the first quarter of 2019.

Hometown segment and Outlet segment comparable store sales declined 13.2% and 2.0%, respectively, in the first quarter of 2019.

Consolidated gross margin was $62.0 million, or 21.3% of net sales, in the first quarter of 2019 compared to $87.5 million, or 22.9% of net sales, in the first quarter of 2018.

The gross margin rate decrease of 160 basis points was driven by a $5.1 million increase in closing store costs.

Adjusting for store closing costs, the Hometown gross margin rate decreased 203 basis points to 16.6%.

The Outlet gross margin rate increased 230 basis points to 27.8%.

Consolidated selling and administrative expenses decreased 25.3% to $67.5 million, or 23.2% of net sales, in the first quarter of 2019 from $90.5 million, or 23.7% of net sales, in the comparable quarter last year.

The dollar decrease was primarily due to lower expenses from stores closed (net of new store openings), lower commissions paid to dealers and franchisees on lower sales volume, lower marketing expense, and lower IT transformation investments.

IT transformation investments were $4.2 million, or 1.5% of sales, in the first quarter of 2019 compared to $5.7 million, or 1.5% of sales, in the first quarter of 2018.

Sears Hometown and Outlet Stores recorded operating losses of $7.8 million and $5.6 million the first quarters of 2019 and 2018, respectively.

The increase in operating loss was due to lower volume and a lower gross margin rate (including the impact of accelerated store closing costs), partially offset by lower selling and administrative expenses.

Sears Hometown and Outlet Stores recorded a net loss of $12.1 million for the first quarter of 2019 compared to a net loss of $9.4 million for the prior-year comparable quarter.

Consolidated adjusted EBITDA increased $1.3 million to $4.2 million in the first quarter of 2019 from $2.9 million in the first quarter of 2018.

Hometown adjusted EBITDA increased $0.9 million to a $5.0 million loss in the first quarter of 2019 from a $5.9 million loss in the first quarter of 2018.

Outlet adjusted EBITDA increased $0.4 million to $9.2 million in the first quarter of 2019 compared to $8.8 million in the first quarter of 2018.

June 1, 2019


What to read next
POST Online Media Contact