Sears Holdings' profit down 50% in Q1

Share this content:

Sears Holdings experienced a 50% plummet in net income for the first quarter of 2010, decreasing from $34 million in the year-ago period to $17 million in profit this quarter. However, the retailer did experience a 1.2% increase in its US comparable store sales and 1.7% increase at Kmart for the first quarter, which ended May 1.

Net income attributable to Sears Holdings' shareholders fell 38% year-over-year to $16 million for the quarter.

The retailer's overall revenues for the quarter were flat at $10 billion, hurt in part by the closing of 63 Kmart and Sears stores. Operating income for the period ending May 1 declined to $98 million, down from $128 million in 2009. Home appliances, apparel, home and toy categories assisted sales, while food, tools and home electronic categories were down. It did not break out results from its Lands' End division.

In its Q1 earnings report released May 20, Sears Holding cites the company's drop in operating income the result of a decline in its gross margin rate of 40 basis points, precipitated by a “reduction in selling and administrative expenses of $18 million.” However, the company stated that these expenses were comparably lower than the $36 million costs incurred for Sears' continued investment in multichannel and ShopYourWay rewards program.

According to research analysts at Credit Suisse who track the fiscal performance of Sears, its Q1 earnings, in comparison to its direct competitors, was “disappointing.”

“This was the quarter of the government appliance stimulus, of much better and earlier weather, and of improving consumer confidence,” wrote the analysts in a report released May 20 appraising Sears' Q1 earnings. For Sears, not being able to show improvement with these factors at work is “worrisome.”

In addition to noting Kmart's increase in store sales, Sears Holdings Corp's Interim CEO and president W. Bruce Johnson said in a public statement that the company had been experiencing momentum from having partnered with state agencies to sell energy-efficient appliances.

Loading links....
close

Next Article in Multichannel Marketing

Sign up to our newsletters

Company of the Week

We recently were named B2B Magazine's Direct Marketing Agency of the Year, and with good reason: We make real, measureable, positive change happen for our clients. A full-service agency founded in 1974, Bader Rutter expertly helps you get the right message to the right audience at the right time through the right channels. As we engage our clients' audiences along their journey, direct marketing (email, direct mail, phone, SMS) and behavioral marketing (SEM, retargeting, contextual) channels deliver information relevant to the needs of each stage. We are experts at implementing and leveraging marketing technologies such as CRM and marketing automation in order to synchronize sales and marketing communications. Our team of architects and activators plan, execute, measure and adjust in real time to ensure the strategy is working as needed and change things if it's not.

Find out more here »

DMN's Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here