Sears Holdings highlighted that January 2016 was the best monthly comparable store sales performance for the year, which shows an improving trend, thus creating a positive outlook for upcoming months.
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Sears said Tuesday that it has reduced its debt by about $1 billion compared with 2014, and anticipates fourth-quarter revenue of $7.3 billion and full-year revenue of $25.1 billion.
Sears expects to report its final fourth quarter results by February 25th, at which point they will likely also detail more on the move to close to stores and the direction of the company.
The company reported a 7.1 percent drop in sales at established stores during the holiday quarter, hurt by weak demand for apparel – a business that has a “substantial impact” on overall profitability.
“The holiday selling season proved to be challenging”, Sears said, with warm weather and “intense competition” pressuring margins and driving sales declines, particularly in its apparel segment.
For the full year, total revenue is expected to fall almost 20 percent to $25.1 billion and total comps will decline 9.2 percent, including a 7.3 percent decrease at Kmart and an 11.1 percent drop at Sears. Efforts will include reducing fixed costs and improving inventory management, and speeding up the timetable for about 50 store closures that were scheduled for the next few months.
Based on the disappointing performance during the quarter, Sears said, it will speed up the shuttering of unprofitable stores and look to further reduce costs.
In addition, Sears Holdings intends to sell at least $300 million worth of assets during the first half of fiscal 2016, which could include offloading more of its real-estate portfolio. Steps announced Tuesday would shave an additional $550 million to $650 million off of expenses, Sears said.
More asset sales could be coming.
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But there’s a limit to what the company can do, and omni-channel retailers do need to be able to leverage their brick-and-mortar stores to reach customers. As part of this transformation, we intend to optimize the value of our assets and to take actions that will generate positive Adjusted EBITDA in the near future.
