Department store chain Sears Canada Inc on Thursday posted a fall in second quarter net income, excluding items, to 18 Canadian cents a share versus 23 Canadian cents a share in the year-ago period.

The Toronto-based company said total revenues for quarter ended June 28 fell 7.8 per cent to C$1.46 billion from C$1.59bn last year with same-store sales for the 13 week period down 6.5 per cent.

Chairman and CEO, Mark Cohen, said: "Sales in the second quarter, heavily influenced by our planned reduction in unprofitable promotions as well as the generally unfavourable sales environment described by others, showed substantial improvement over the first quarter.

"Comparable store sales were down significantly in April, up slightly in May and down moderately in June. Though sales were below our plan in the quarter, gross margins were up 109 basis points over last year, and well above our plan. Inventory remained tightly controlled, ending the quarter at C$768m, 6.3 per cent below last year.

He added his firm's guidance for the full year continues to be C$1.50 a share for operating earnings, which would be a 15 per cent improvement on last year.