NEW YORK — Sears’ extended decline in sales persisted during the first quarter and the storied retailer vowed to make additional spending cuts to offset its slowing business.
The company’s operating loss widened to $222 million, or $2.15 per share, on weak sales. Sears Holdings has been closing stores and selling brands long affiliated with Sears, including Craftsman. A year ago the company reported a loss of $181 million.
Still, the company registered a profit of $244 million, or $2.28 per share, counting a gain from the sale of assets. Its shares surged $1.63, or 22 per cent, to $9.10 in trading Thursday.
Revenue fell 20 per cent, to $4.3 billion, and sales at established stores fell 11.9 per cent.
In March, Sears Holdings Corp. said there is “substantial doubt” it could continue as a viable concern, with intense pressure coming from companies like Wal-Mart, Target and Amazon.com. It has insisted that its actions to turn around its business should help reduce that risk.
Asset sales have bought the retailer time, but it said recently that pension agreements may prevent the sale of more businesses, potentially leading to a shortfall in funding.
Sears, which employs 140,000 people, announced in January that it would close 108 additional Kmart and 42 more Sears locations, and unveiled yet another restructuring plan in February. The company has lost more than $10.4 billion since 2011, the last year that it made a profit.
“While this was certainly a challenging quarter for our company, it was also one that clearly demonstrated our commitment to return Sears Holdings to solid financial footing,” Chairman Eddie Lampert said in a company release. “We recognize that we need to accelerate our efforts to improve our operational performance and are moving decisively with our $1.25 billion restructuring program.”
Lampert’s hedge fund has forwarded millions in funding to keep Sears afloat.
The company remains in a “tenuous” position, according to Evercore analyst Greg Melich, with operating losses showing no sign of improvement and sales in freefall.
“Sears does not appear well positioned for the rest of 2017,” Melich said, citing its weak store base, anemic sales and continued market share loss in most major categories.
Prior to the market opening, shares of the Hoffman Estates, Illinois, company had dropped 20 per cent since the beginning of the year. The stock had fallen 38 per cent in the last 12 months.