Sears Canada Q1 FY'13 sales down 6.6%

The net loss for the quarter this year was $31.2 million or $0.31 cents per share compared to net earnings of $93.1 million or $0.91 cents per share for the same period last year. Included in the net earnings for the first quarter last year was a pre-tax gain of $164.3 million related to the lease terminations of three stores as announced by the Company on March 2, 2012.

Excluding the gain from lease terminations, the net loss in the first quarter last year was $44.9 million. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for the 13-week period ended May 4, 2013 was a loss of $9.8 million compared to a loss of $22.7 million for the 13-week period ended April 28, 2012, an improvement of $12.9 million.

"We are encouraged to see significant improvements in areas that we have targeted with our Transformation, particularly in the soft lines businesses," said Calvin McDonald, President and Chief Executive Officer, Sears Canada Inc. "We experienced year over year growth in Apparel and Accessories for the second quarter in a row, the first time this has happened in over six years.

“The Bed and Bath category has also improved this quarter compared to the same period last year. Our Major Appliances business maintained market share but experienced sales declines, as did our Furniture and Mattress businesses all of which suffered in a very tough quarter of trading because of unfavourable economic conditions and low consumer confidence. The unseasonable cool spring in most parts of the country had an adverse impact on sales of outdoor power equipment, patio, and other seasonal lines.

"We are continuing to make progress in our Transformation, and we believe the growth in Apparel and Accessories is an indicator that we are on the right track," continued Mr. McDonald.

"At the same time our rate management initiatives have positively impacted gross margin by 50 basis points, while our focus on controlling costs has reduced expenses by 7.9% compared to the same period last year. Factoring out the gains from the return of the three leases to the landlord last year, we are seeing an overall improvement in our bottom line for the quarter as compared to the first quarter last year.

"The efforts of our 29,000 associates are a key component in making the Company's three-year Transformation a success. While their hard work is starting to bear fruit, there is still work to do," added Mr. McDonald.

Adjusted EBITDA is a non-IFRS measure, and excludes finance costs, interest income, share of income or loss from joint ventures, income tax expense or recovery, depreciation and amortization and income or expenses of a non-recurring, unusual or one-time nature.

Sears Canada is a multi-channel retailer with a network that includes 181 corporate stores, 248 hometown dealer stores, over 1,400 catalogue and online merchandise pick-up locations, 101 Sears Travel offices and a nationwide home maintenance, repair, and installation network.

Sears Canada