Sears Canada sales fall 7.1% in third quarter

Retailer posts C$46.6 million loss, partly due to charge

Michael J. Knell -- Furniture Today, November 22, 2011

TORONTO — Sears Canada saw its same store sales drop 7.8% during the third quarter of its current fiscal year. This prompted its U.S.-based parent to blame it, at least in part, for the widening losses the company is incurring south of the border.

Multi-channel retailer Sears Canada said revenues for the 13-week period ending Oct. 29 were C$1.11 billion, down 7.1% from the comparable period in 2010.

The retailer posted a net loss was C$46.6 million or 44 cents per share, reversing earnings of C$20.8 million or 19 cents per share a year ago. However, the company said that earnings for the latest quarter were reduced by a pretax charge of C$45.6 million related to the disposition of excess inventory and restructuring costs in its Home Services business unit.

Operating EBITDA (earnings before interest, taxes, depreciation and amortization) fell to C$11.2 million from C$57.2 million in the third quarter of 2010.

Revenue for the 39-week period ended Oct. 29 was C$3.25 billion, down 6.5% from a year earlier, as same-store sales decreased 7.6%.

The net loss, including the third-quarter pretax charge, was C$98.8 million or 94 cents per share compared with net earnings of C$32.5 million or 30 cents per share a year ago.

"We are not pleased with our results this quarter and have significant work ahead of us," said Calvin McDonald, who was named president and CEO of Sears Canada three months ago.

Chicago-based Sears Holding, which owns 92% of the outstanding shares of Sears Canada, reported it lost US$421 million or US$3.95 per share for the period ended Oct. 29. A year earlier it lost US$218 million or $1.98 per share.

In a statement, Sears Holding attributed the decline to weakness in Canada, declining sales of major appliances and consumer electronics at its flagship Sears Roebuck & Co. sales as well as softer clothing sales at its Kmart stores.

Fiscal third quarter revenue for Sears Holding fell 1% to US$9.57 billion, compared to US$9.68 billion for the same period last year.

As of Oct. 29, Sears Canada's network that including 196 corporate stores, 285 hometown dealer stores, 31 home showrooms and more than 1,700 catalogue merchandise pick-up locations. The retailer also publishes Canada's most extensive general merchandise catalogue and offers shopping online at www.sears.ca.