This baby is going down the tubes at an ever faster speed.
Sears Holdings, after warning in March that ‘substantial doubt exists’ about its ability to continue operating as a ‘going concern,’ rubbed salt in those doubts in its second-quarter earnings report.
Quarterly revenue plunged 23% year-over-year to $4.37 billion.
It says $770 million of that $1.33-billion plunge was a result of the endless series of store closings with which Sears is trying to keep itself out of bankruptcy for as long as possible.
In its fiscal year 2017, it already closed about 180 stores and expects to shutter an additional 150 stores in the third quarter. Those closings had been announced previously. But in its earnings release, it announced the closing of 28 more Kmart stores ‘later this year.’ Liquidation sales will begin as early as August 31, it said.
The rest of the plunge was caused by same-store sales (sales at stores open longer than one year) which dropped 11.5%. ‘Softness in store traffic’ the company called it. But the trend is falling off a cliff: In Q2 2016, same-store sales had dropped ‘only’ 5.2%. Now they’re plunging at more than double that rate. Despite the ceaseless corporate rhetoric of operational improvements, this baby is going down the tubes at an ever faster speed.
This post was published at Wolf Street by Wolf Richter ‘ Aug 25, 2017.