With fewer full-line stores and weak sales in select categories.
Sears released its financial results for fourth quarter and full year ended January 28, 2017, reporting an operating loss of $717 million for the quarter, and a $1.98 billion loss compared to $1 billion loss for 2015. However, adjusted EBITDA was $61 million in the red in the fourth quarter of 2016, an improvement from $137 million in the red for the prior year fourth quarter.
Sears Holdings chairman and CEO, Edward Lampert said, “We delivered significant adjusted EBITDA improvement in the fourth quarter, reflecting our firm focus on profitability to offset ongoing revenue pressures. Building on this positive momentum, we are taking decisive actions to become a more agile and competitive retailer with a clear path toward profitability.”
Sears Holdings chief financial officer, Jason Hollar added, “While the challenging holiday selling season pressured margins and comparable store sales, we were able to successfully improve profitability through disciplined inventory and costs management. We will continue to take actions to drive profitability, generate liquidity and adjust our overall capital structure while continuing to meet all of our financial obligations.”
Revenue was $6.1 billion for the fourth quarter of 2016, compared to $7.3 billion for the prior year fourth quarter. The year-on-year decline in revenue was primarily attributed to having fewer Kmart and Sears full-line stores in operation, which accounted for $596 million of the revenue decline, as well as a 10.3% decline in comparable store sales for the quarter, which accounted for $555 million of the revenue decline.
At Kmart, comparable store sales decreased 8% during the fourth quarter primarily driven by declines in the consumer electronics, grocery and household, apparel and toys categories. Sears Domestic comparable store sales decreased 12.3% during the quarter due to declines in the home appliances, apparel, consumer electronics and tools categories.