Sears reported that its fourth-quarter sales fell 4.1 percent to $12.5 billion and the retailer measured a loss of $2.4 billion compared with profit of $374 million one year ago. Fourth-quarter domestic comparable store sales declined 3.4 percent, comprised of declines of 4.1 percent at Sears Domestic and 2.7 percent at Kmart. Sears had warned shortly after Christmas that the retailer experienced a difficult quarter.
For the fiscal-year, revenues decreased 2.6 percent $41.6 billion while comparable store sales at Sears’ U.S. stores declined 2.2 percent and by 1.4 percent for Kmart. Sears Canada registered 7.7 percent decline during the year. The total net loss for fiscal 2012 was $3.14 billion.
In light of these results, Sears outlined actions it was taking to enhance liquidity and boost the company’s operating performance. Measures included reducing expenses, tightening inventory levels and capping borrowing limits. The company also plans to generate as much as $500 million by spinning-off its Sears Hometown and Outlet business, along with certain hardware stores, and another $270 million from selling 11 of its stores by April 2012.
Sears’ chairman, Edward Lampert, told investors, ”Our poor financial results in 2011, culminating in a very poor fourth quarter, underscore the need to accelerate the transformation of Sears Holdings.”
Lampert said, ”We do not intend to sit idly by and have it be business as usual. We will make the difficult decisions required to position Sears Holdings for the future and we will not accept such poor performance without making substantial adjustments. We have a portfolio of businesses and assets that deserve to generate substantial value for our shareholders. The adjustments and actions we intend to take will reduce the risk of downside scenarios playing out and will be informed by understanding and appreciating what type of profit performance we need to deliver on our investment in these assets.”