Comp-store sales slip 7.5% for Kmart Q3
HOFFMAN ESTATES, Ill. — Kmart parent-company Sears Holdings reported on Thursday that revenues for the company decreased $1.5 billion to $5.8 billion for the third quarter ended Oct. 31. At Kmart, comp-store sales were down 7.5% for the quarter, with overall Kmart sales of $2.2 billion for the period.
Strong categories with increased comp-store sales at Kmart included home appliances and mattresses, but any increases were offset by declines in the drug store, grocery and household, apparel and consumer electronics categories. Kmart's gross margin rate for the third quarter was up 40 basis points, with increases in drug store, toys, electronics and apparel — driven by less clearance and promotional activity, according to the company.
A significant portion of the decline in the third quarter was related to the company’s efforts to streamline operations and focus on its member-centric approach. Kmart ended the quarter with 952 stores, down from 1,050 stores in the same quarter last year. Sales to Shop Your Way members in Sears Full-line and Kmart stores accounted for 75% of eligible sales for the third quarter.
"We remain focused on restoring Sears Holdings to profitability by concentrating on our best stores, rewarding our best members and pursuing our best categories through innovative solutions to product and service offerings,” said Edward Lampert, Sears Holdings chairman and CEO. “Through deliberate strategic actions, notably with respect to our promotional design and marketing spend, we have made meaningful progress in our transformation and reported a fifth consecutive quarter of improved year-over-year results. As expected, the results of these actions have led to comparable store sales declines despite an increase in profitability.”
“At the same time, we recognize a lot of work remains and we have brought in a number of experienced leaders to drive our business forward with a plan to win as a member-centric integrated retailer,” he said. “As we head into the fourth quarter, we have intensified our focus on our product offerings and promotions in order to enhance member engagement and provide our members with the best experience possible throughout the holiday shopping season."
Net loss attributable to Sears Holdings' shareholders was $454 million for third quarter 2015, compared with a net loss of $548 million for the same period the prior year.