• Q3 loss narrows to $21.9m
  • Revenues down 6.8% to $1.04bn
  • Same store sales declined 5.7%

Retailer Sears Canada has managed to halve its third-quarter losses after favourable comparisons with the year-ago period helped offset a 6.8% fall in sales.

Net loss narrowed to CAD21.9m (US$21.9m) during the 13-week period ended 27 October, compared to CAD44.1m a year ago. Last year's results included a CAD45.6m restructuring charge.

Total revenues in the quarter fell to CAD1.04bn, compared to CAD1.11bn last year. Same store sales slipped 5.7%. The company attributed the decline to a reduction in promotional and clearance sales in apparel.

CEO and president Calvin McDonald said: "Although we made progress in the quarter, we can and must do more. Our plan is working, however our pace of execution has not met our expectations.

"Recent changes to our management team have been made that are designed to lead the organisation effectively through the transformation and help us achieve our operational and financial objectives."

The board of Sears Holdings also completed the spin-off of 44.5% of its 95.5% interest in Sears Canada today (13 November). 

Show the press release

Sears Canada Reports Third Quarter Results

TORONTO, Nov. 13, 2012 /CNW/ - Sears Canada Inc. (TSX: SCC) today announced its unaudited third quarter results.  Total revenues for the 13-week period ended October 27, 2012 were $1,037.5 million compared to $1,113.2 million for the 13-week period ended October 29, 2011, a decrease of 6.8%.  Same store sales decreased by 5.7% during this period.

The net loss for Q3 was $21.9 million or 22 cents per share compared to a net loss of $44.1 million or 42 cents per share in the third quarter last year.  Included in the net loss for the quarter last year is a $45.6 million pre-tax charge relating to the disposition of excess inventory and internal restructuring costs. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization and Non-Operating Activities) for Q3 2012 was $(3.0) million versus $14.5 million in the same 13-week period last year.

Total revenues for the 39-week period ended October 27, 2012 were $3,002.7 million compared to $3,253.4 million for the 39-week period ended October 29, 2011, a decrease of 7.7%.  Same store sales decreased by 6.4% during this period.

Net earnings for the 39-week period ended October 27, 2012 was $61.3 million or 60 cents per share compared to a net loss of $91.3 million or 87 cents per share for the 39-week period ended October 29, 2011.  This year's net earnings include a pre-tax gain of $167.1 million relating to the early surrender and return of leases on four properties.  Included in the net loss for the 39-week period ended October 29, 2011 is a $45.6 million pre-tax charge, the same as described in the second paragraph of this release.   Adjusted EBITDA for the first nine months of the year was $(15.4) million versus $22.2 million for the same period last year.

Commenting on the quarter, Calvin McDonald, President and Chief Executive Officer, Sears Canada Inc. said, "Our decrease in revenue was primarily due to a significant reduction in promotional and clearance sales in apparel,  declines in pre-season sales of snowblowers,  and the planned exiting of certain product lines and reduced sales of televisions in electronics.  We carefully managed expenses and reduced our spend in payroll and marketing and advertising expenses.

"We continue to make progress in our transformation strategy and are seeing positive signs of success," continued Mr. McDonald. "For example, even though we cycled over our attack plan from last year in major appliances and mattresses, we continue to see strength in these two key hero categories. The Baby's Room, another key hero category, which we launched in June, has experienced positive sales increases since this time over the previous year. In addition, we experienced positive sales with our Back to School program, both key indicators that we are attracting a younger, family oriented customer.

"Although we made progress in the quarter, we can and must do more. Our plan is working, however our pace of execution has not met our expectations. Recent changes to our management team have been made that are designed to lead the organization effectively through the Transformation and help us achieve our operational and financial objectives."

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