Sears Holding Corp. said Thursday that its adjusted third-quarter loss narrowed, as the company pushed to turn around its ailing business.
But sales in stores open at least one year continued to tumble in both its Kmart and Sears stores, and investors sent shares down nearly 6 percent in aftermarket trading.
To restore profitability, Sears has embarked on a plan to aggressively cut costs, reduce inventory, sell off some assets and spin off others. The company is facing falling sales and tough competition as the crucial holiday season — when a retailer can make up to 40 percent of annual revenue — revs up.
"We will continue to take the actions necessary to create value and retain the flexibility to invest in the strategic priorities of our company," said CEO Lou D'Ambrosio in a statement.
The company also outlined its holiday plans, which include opening Sears and Kmart stores at 8 p.m. on Thanksgiving Day, offering exclusive toys, improving its in-store holiday displays and offering coupons and other incentives to loyalty program members.
"Our products and our integrated retail experience are coming together this holiday season," said Ron Boire, chief merchandising officer, in a conference call with investors.
The Hoffman Estates, Ill.-based company controlled by financier Eddie Lampert lost $498 million, or $4.70 per share. That compares with a loss of $421 million, or $3.95 per share, a year ago.
Excluding one-time items related to tax expenses, store closings and pension expense, Sears lost $1.99 per share, compared with $2.50 per share on the same basis last year.
Revenue dropped nearly 6 percent to $8.86 billion. Sales in stores open at least one year fell 1.6 percent at U.S. Sears stores and 4.8 percent at Kmart stores. Stronger sales of clothing and appliances were offset by weak sales of groceries, household products and consumer electronics.
Costs of sales, buying and occupancy, as well as selling and administrative expenses, were both down for the quarter. Inventory fell $1.4 billion to $8.6 billion at Oct. 27.
The company completed the spinoff of part of its stake in Sears Canada Inc. on Wednesday. It also recently spun off its Sears Hometown and Outlet Stores Inc.
Since May Sears has invested heavily in improving the customer experience at its stores, with changes such as improved displays and iPads for sales staff to research products and help customers check out wherever they are in the store.
It has also increased services like ordering online with in-store pick up and shipping in-store orders home. D'Ambrosio said half of all online sales now include an interaction with another channel.
But the changes so far haven't been enough to offset a steep decline in sales, as customers turn online and elsewhere to make purchases.
Shares fell $3.81, or 6.5 percent, to $54.67 in aftermarket trading. They ended the regular session up 6 cents at $58.48. The stock is trading near the middle of its 52-week range. It reached its low of $26.90 on Jan. 5 and peaked at $79.99 on March 16.