Mar 12, 2017 10:57 PM EDT
US department store operator, Sears, has posted another quarterly operating loss that is even worse than the previous corresponding period which the company attributes to having fewer Kmart and Sears Full-line stores in operation.
The embattled department store operator lost $717 million for the fourth quarter, much sharper than the $539 million loss during the previous corresponding period. That took the company's full-year loss to just short of $2 billion.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $61 million in the fourth quarter of 2016 compared to the $137 million in the prior year fourth quarter.
"We delivered significant adjusted EBITDA improvement in the fourth quarter, reflecting our firm focus on profitability to offset ongoing revenue pressures," said Edward S. Lampert, chairman and CEO of Sears Holdings Building. "On this positive momentum, we are taking decisive actions to become a more agile and competitive retailer with a clear path toward profitability."
In February 2017, Sears initiated a restructuring program targeted to deliver at least $1.0 billion in annualized cost savings. The savings include cost reductions from the previously announced closure of 108 Kmart and 42 Sears stores.
The holdings also recently completed a previously announced sale of its Craftsman brand to Stanley Black & Decker. The company received an initial upfront cash payment of $525 million, subject to closing costs and an adjustment for working capital changes at closing. In addition, Stanley Black & Decker will pay a further $250 million in cash in three years and Holdings will receive payments of between 2.5 percent and 3.5 percent on new Stanley Black & Decker sales of Craftsman products for the next 15 years.
Jason M. Hollar, Holdings' CEO, said that while the challenging holiday selling season pressured margins and comparable store sales, they 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," Hollar said.
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