Sears Holdings Reports More Losses For Third Quarter

Sears Holdings (NASDAQ:SHLD), operator of Sears and Kmart stores, reported another dismal quarter for the third quarter of its fiscal year. The retailer posted a loss of $748 million in the latest quarter, the company’s 20th consecutive quarterly loss. The company lost considerably more money than it did for the same quarter a year ago, when it recorded a $454 million loss.

Revenue fell by $721 million for the quarter, while comparable-store sales suffered a 7.4 percent decline. Same-store sales dropped 10 percent at Sears and 4 percent at Kmart. The sales drop accounted for $304 million of the revenue decline.

Sears Holdings has already lost $1.6 billion in the first ten months of the year, compared to $549 million in the same period last year. The company has recorded losses of $7.1 billion over the four previous fiscal years and has lost nearly $9 billion over the last five years. The company’s stock has shed 38 percent of its value since the start of the year.

The company’s executives spent a significant amount of time on the latest earnings call convincing creditors, vendors, and shareholders that the company has a future. CEO Edward Lampert insists that the company has a path back to viability, saying, “We understand the concerns related to our operating performance and are committed to transforming our company.”

Future plans for Sears hinge on closing stores, making others smaller, and spending less money across the board. The company is reportedly looking to sell off Sears’ house brands, including Craftsman, Diehard, and Kenmore. It is also looking for tenants to lease closed stores.

CFO Jason Hollar said, “We do not intend to borrow money to fund continued operating losses, but rather to provide us with flexibility as we transition to an asset-light member-centric integrated retailer leveraging our Shop Your Way program.” Shop Your Way is an app that lets shoppers earn points that can be redeemed toward future purchases. The company has spent over $2 billion on the program since its inception. The CFO did not provide sales numbers for Shop Your Way.

Sears Holdings has borrowed $500 million from investors to keep itself afloat. Lampert’s hedge fund loaned the company $300 million in August. Sears Holdings currently reports $2.2 billion in long-term debt along with $618 million in short-term debt and has $174 million available to borrow on its revolving credit facility.