Sears Posts Loss as Sales Sag Further --- Cost Cuts at Kmart Parent Fail to Stop Hemorrhaging as More Shoppers Go Elsewhere
The swoon in sales at Sears Holdings Corp. has spread to the company's profits, leading investors to question again the future of the pioneering retailer controlled by financier Edward S. Lampert.</br></br>After surprising investors with a small profit earlier this year, Sears posted a quarterly loss Thursday on a 10% drop in revenue from a year earlier.</br></br>The $94 million loss spooked investors who had been expecting Sears Holdings to post a profit. Sears shares tumbled 12%, or $8.76, to $65 in 4 p.m. trading Thursday on the Nasdaq Stock Market as analysts surmised that the previous quarter's $26 million profit, achieved largely due to aggressive cost cuts, may have been an anomaly.</br></br>Mr. Lampert was hailed by some analysts as the next Warren Buffett when he combined the struggling Sears and Kmart chains in 2005 and vowed to return them to prosperity. But the billionaire investor, who controls most of Sears Holdings stock through his Greenwich, Conn., hedge fund, ESL Investments Inc., has been unable to reverse longstanding sales declines at Sears and Kmart.</br></br>Sales at U.S. stores open at least a year dropped 3.9% at Kmart and 12.5% at Sears. The company attributed the declines to lower clothing sales and the effect of the housing slump on appliance and furniture sales. Sears declined to make Mr. Lampert or company executives available for comment.