Sears Canada revenues decline 9.6% in second quarter
Michael J. Knell -- Furniture Today, August 23, 2013
TORONTO — Returning two prime locations in Canada's largest market while granting an option on a third produced a strong uptick in earnings for Sears Canada in its second fiscal quarter.
Revenue and same-store sales fell, which the multi-channel retailer partially attributed to declines in the home furnishings, mattress and consumer electronics segments of its business.
Revenue for the 13 weeks ended Aug. 3 was C$960.1 million, a decline of 9.6% from the comparable period a year earlier. Same store sales fell 2.5%.
Net earnings for the quarter were C$152.8 million or C$1.50 per share, compared with a loss of C$9.8 million or 10 cents per share a year ago.
Included in earnings is a pre-tax gain of C$185.7 million generated when Sears Canada returned the leases of two Toronto area stores, in the Yorkdale and Square One shopping centers, to its landlord in a deal valued at C$191 million. Sears Canada also granted an option to the landlord for a third area store in Scarborough.
The company said that excluding the after-tax gain of C$164 million, the net loss for the second quarter of 2013 was C$11.2 million or 11 cents per share.
Total revenues for the 26-week period ended Aug. 3 were C$1.83 billion, down 8.2% from the 2012 fiscal first half. Same-store sales decreased 2.5%.
First half earnings were C$121.6 million or C$1.19 per share, compared with C$83.2 million or 81 cents per share in the 2012 period.
Excluding the after-tax gains from the vacated stores of C$164 million in 2013 and C$137.9 million in 2012, the net loss was C$42.4 million or 42 cents per share this year and C$54.7 million or 54 cents per share in 2012.
"This period marks the half-way point of our three-year transformation plan, and although we have much work to do, we are starting to see progress," Calvin McDonald, president and CEO, said in a statement.
Also during the second quarter, Sears unveiled its newly redesigned and remerchandised Sears Home stores in the Ontario cities of Whitby and Ancaster.
In addition, the owner of its Sears Hometown outlet in Woodstock, Ontario launched a C$100 million class action lawsuit saying the company "breached its legal obligations by depriving the dealers of the realistic opportunity to earn a living wage and make a reasonable profit from their store businesses."
Sears Holding, U.S. parent of Sears and Kmart, remains the majority shareholder in Sears Canada, which operates 181 corporate stores, 246 hometown dealer stores, over 1,400 catalogue and online merchandise pick-up locations, 101 Sears Travel offices and a nationwide home maintenance, repair, and installation network. It also publishes Canada's most wide circulated merchandise catalogue and offers shopping online at www.sears.ca.