Sears posts $2.4 billion loss, shedding some stores
The disclosures of the store plans came as the Hoffman Estates, Illionis-based company reported it swung to a loss in the fourth-quarter while revenue fell 4 percent to $12.48 billion.
HOFFMAN ESTATES, Illinois
Sears Holdings Corp. said Thursday that it will spin off its smaller Hometown and Outlet stores as well as some hardware stores in a deal expected to raise $400 million to $500 million as it seeks to regain profitability and market share.Skip to next paragraph
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The moves drove Sears' stock up more than 13 percent in premarket trading.
The disclosures of the store plans came as the Hoffman Estates, Illionis-based company reported it swung to a loss in the fourth-quarter while revenue fell 4 percent to $12.48 billion. Adjusted earnings totaled 54 cents per share, below analyst expectations.
In a call with analysts, CEO Lou D'Ambrosio said results were "unacceptable."
"We know that and are taking immediate actions to address it," he said.
Results were hurt by high costs for cotton and fuel, unseasonable weather that led to lower sales of winter gear and low consumer demand for two of its biggest categories, appliances and consumer electronics, the company said.
Led by billionaire investor Edward Lampert, Sears has suffered losses as consumers turn elsewhere. It has sought to improve results by cutting jobs and costs and closing underperforming stores.
Investors have long speculated that Lampert's long-range plan could be to unlock the value of the company's massive real estate holdings.
Net loss for the three months ended Jan. 28 amounted to $2.4 billion, or $22.47 per share. That compares with net income of $374 million, or $3.43 per share, a year ago.
Excluding a $2.5 billion in charges related to a required reserve related to deferred tax assets, impairment charges and costs related to close stores and severance, net income was 54 cents per share. Analysts expected much higher adjusted earnings of 76 cents per share.
Revenue fell 4 percent to $12.48 billion from $13 billion last year. Analysts expected $12.44 billion.
For the year, net loss totaled $3.1 billion, or $29.40 per share, compared with net income of $133 million, or $1.19 per share, a year earlier.
Revenue fell 3 percent to $41.57 billion from 442.66 billion a year ago.
Its shares rose $6.92, or 13.3 percent, to $59 in premarket trading.