Sears reported its
20th straight quarterly decline on Thursday and acknowledged that the company has “fallen short” of expectations for a recovery.
The company said revenue fell 12.5% to $5 billion in the third quarter.
Same-store sales dropped 7.4%, including a 10% decrease at Sears stores and a 4.4% decrease at Kmart stores.
Sears’ cash and equivalents fell 12% to $258 million in the period.
The company said it will continue to accelerate store closures to help stop the bleeding. Sears is shutting down 64 Kmart stores this month, following the closure of nearly 80 Sears and Kmart stores in July.
“We understand the concerns related to our operating performance,” Sears Chief Financial Officer Jason Hollar said in a pre-recorded conference call. “We have fallen short on our own time-table for achieving the profitability that we believe the company is capable of generating. With that said, the team remains fully committed to restoring profitability to our company and creating meaningful value.”
Addressing widespread speculation about a potential Sears bankruptcy, Hollar reiterated that the company has a “rich asset base” to draw from in order to stay in operation.
“We believe that our liquidity needs will be satisfied through the foreseeable future using the levers available to us through our portfolio of assets,” Hollar said.
Sears reported earnings Thursday one week after losing two of its highest-ranking executives in the midst of the key holiday shopping season.
The outgoing executives include Jeff Balagna, formerly Sears’ executive vice president, and Joelle Maher, formerly Sears’ president and chief member officer
Sears’ sales have dropped from $41 billion in 2000 to $15 billion in 2015. Kmart, which merged with Sears in 2005, has seen its sales plunge from $37 billion to $10 billion in the same period.
As Business Insider reported last month, at least half a dozen suppliers have “significantly” reduced product shipments to Sears over fears of a bankruptcy, according to Marc Wagman, executive vice president of trade credit and political risk at the insurance brokerage firm Arthur J. Gallagher & Co., which represents the Sears suppliers to insurers.
The companies’ concern over Sears’ financial health has “really accelerated in the last 6 to 12 months,” Wagman told Business Insider.
According to a recent report by The Wall Street Journal, toy maker Jakks Pacific Inc. recently suspended sales of its products to Kmart, which is owned by Sears Holdings, due to worries about the company’s financial health.
Suppliers have grown concerned after warnings from Sears store employees and a number of banks.
Fitch Ratings in October identified Sears as one of seven major retailers at risk of going bankrupt in the next 12 to 24 months and eventually liquidating.
In September, Moody’s analysts downgraded Sears’ liquidity rating, saying Sears and Kmart don’t have enough money — or access to money — to stay in business.
The Moody’s analysts said Sears is bleeding cash and will have to continue to rely on outside funding or the sale of assets, such as real estate, to sustain operations. Kmart in particular is at risk of shutting down, the analysts said.
Sears CEO Lampert responded in early October, saying “there have never been any plans to close the Kmart format.”
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