Thursday, February 27, 2014

Bleak Retail Reports Continue With Sears and Best Buy

(please stop calling this depression a recovery)
NYTIMES
By ELIZABETH A. HARRIS    FEB. 27, 2014

Sears Holdings announced dismal fourth-quarter earnings on Thursday, which included a holiday season that the company’s chairman described as “tough to terrible” for Sears and many other retailers. Best Buy also released results Thursday, swinging to a profit from its previous fourth quarter.

At Sears, the net loss for the year was $1.4 billion. For the quarter, Sears lost $358 million, compared with $489 million for the year-ago quarter. Sales at American stores open at least a year dropped 7.8 percent, while comparable sales at Kmart stores fell 5.1 percent.

In an attempt to reverse its fortunes, Sears has been transforming itself from a traditional retailer to a company that focuses on members, through its Shop Your Way rewards program. This year, 69 percent of Sears full-line and Kmart sales came from Shop Your Way, up from 59 percent last year.

“Our full-year results are impacted during this transformation as we continue supporting traditional promotional programs and marketing expenditures while we invest in our Shop Your Way program and integrated retail strategy,” said the Sears chairman, Edward S. Lampert. “We have been investing hundreds of millions of dollars annually in our transformation and will continue to invest in the future of the company.”

Best Buy reported earnings of $310 million for the quarter, compared with a net loss of $461 million during the fourth quarter of last year. The company’s profits were better than analysts had expected.

Sales at American stores open for at least a year were down 1.2 percent for the quarter; during the same period last year, sales at comparable stores were up 0.9 percent.

“As we said in our holiday sales release, the fourth quarter was an environment of declining retail traffic, intense promotion, fewer holiday shopping days and severe weather,” Hubert Joly, Best Buy’s chief executive, said in a statement. “In the face of these unusual circumstances, our strategy to be price competitive and provide an improved customer experience resulted in market share gains in a weaker-than-expected consumer electronics market.”