Two of the department store sectors biggest players reported losses during their second quarters. Sears Holdings Corp. (Hoffman Estates, Ill.) said earnings dropped 62.4 percent during its second quarter ended Aug. 2, 2008.
Sales dipped 4.1 percent and same-store sales were down 6.7 percent at Sears’ U.S. stores and 5.6 percent at Kmart.
“Our second quarter results reflect the continued effects of a slowing economy which contributed to the earnings declines we have experienced since the third quarter of 2007,” said interim ceo W. Bruce Johnson. “While it was a difficult quarter, we were successful in reducing our domestic inventory levels by $500 million which should lead to lower markdowns and favorably impact our gross margin rates in the second half of the year.
“Despite the difficult economic environment, we remain focused on long-term value creation and continue to invest in the future of the company,” Johnson added. “Since last year we have added 65 net stores, which consist of home appliance showrooms, dealer stores and outlet stores, and we have continued to expand our online and multi-channel capabilities. In May we added a huge selection of books, DVDs, music and software to sears.com, nearly quadrupling the number of products available.”
Dillard’s Inc. (Little Rock, Ark.) lost $38.3 million in its second quarter, a 52 percent bigger loss than a year ago – even, it’s reported, with a multimillion dollar boost from the sale of a company airplane.
Revenues for the period decreased 2.5 percent and same-store sales were down 4 percent.
“Our accomplishments with expense reduction were not sufficient to offset large disappointments in sales and gross margin,” said ceo William Dillard III. “Clearly, we believe our continued efforts to reduce both capital and operating expenditures and to close underperforming stores are appropriate as we weather challenging economic times.”