US: Sears margins hit Q1 earnings
- Total revenues flat at US$10bn
- Net income falls
- Comparable store sales up at Sears Domestic and Kmart
Sears Holdings has been hit by lower margins leading to it reporting a fall in net income for the first quarter despite a rise in same-store sales.
Net income attributable to Holdings' shareholders for the quarter reached US$16m, or $0.14 per diluted share, in 2010 compared to $26m, or $0.21 per diluted share, in 2009.
Adjusted EBITDA for the quarter was $304m in 2010 compared to $359m in 2009. However, the company did register increases in comparable store sales of 1.7% at Kmart and 1.2% at Sears Domestic.
"Kmart registered a comparable store sales increase for the third consecutive quarter and Sears posted its first quarterly increase in several years as we effectively partnered with state agencies to sell energy-efficient appliances. Sears, however, also experienced lower margin rates during the quarter," said W. Bruce Johnson, Sears Holdings' interim chief executive officer and president.
"On the other hand, our Kmart format performed very well during the quarter, achieving margin rate improvement on top of its increase in sales and nearly doubling its Adjusted EBITDA. Furthermore, we continued to increase our investment in our multi-channel capabilities and ShopYourWay rewards program, while at the same time reducing our expenses."
Total revenues for the quarter of $10 billion in 2010 were flat with the first quarter in 2009.
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