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Sears Canada Q1’FY14 revenues drop 11% to $771.7mn

May 22, 2014 (Canada)

Sears Canada Inc. announced its unaudited first quarter results. Total revenues for the 13-week period ended May 3, 2014 was $771.7 million compared to $867.1 million for the 13-week period ended May 4, 2013, a decrease of 11.0%. Same store sales decreased 7.6%.
 
The balance of the change in revenues is primarily attributable to revenues from stores closed as a result of early termination and amendment of certain full-line store leases and the sale of joint arrangement interests in Fiscal 2013.
 
The net loss for the quarter this year was $75.2 million or 74 cents per share compared to a net loss of $31.2 million or 31 cents per share for the same period last year. Included in the net loss for the first quarter this year were pre-tax transformation expenses of $7.6 million related primarily to severance costs incurred during the quarter. 
 
Also included in net loss for the quarter were pre-tax lease exit costs, warranty and other costs related to SHS and costs for the future settlement of retirement benefits, totaling $11.2 million. Included in the net loss for the first quarter last year were pre-tax transformation expenses of $1.5 million, related primarily to severance costs incurred during the quarter. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for the 13-week period endedMay 3, 2014 was a loss of $58.1 million compared to a loss of $9.8 million for the 13-week period ended May 4, 2013.
 
"The unseasonable weather had an adverse effect on our revenues," said Douglas C. Campbell, President and Chief Executive Officer, Sears Canada Inc. "Sales of Spring merchandise were below last year, as winter-like weather was prevalent in most parts of the country well into the new season with cooler temperatures and significantly more snow in many areas. However, we took advantage of the extended winter and cleared a significant quantity of fall and winter carryover, virtually emptying our stockrooms and getting it in front of the customer. 
 
As a result, although our same store sales in Apparel & Accessories (A&A) were comparable to last year in dollars, same store sales in A&A increased 4.0% from a units standpoint. We strategically reduced ending inventory by $99.0 million compared to the end of the same quarter last year.
 
"We are pleased with the progress we are making in re-establishing retail fundamentals in the business so that we can have a solid foundation on which to implement new initiatives and build sustainable growth," continued Mr. Campbell. 
 
"Our procurement of a new retail merchandising system and order management platform, which we announced in April, is designed to take us into the future with tools that we believe will greatly enhance the customer experience across all channels over the next several years. We are making investments with long-term benefits like this with confidence as we are committed to providing customers with an unparalleled multi-channel experience now and in the decades to come."
 
About Sears Canada
Sears Canada is a multi-channel retailer with a network that includes 176 corporate stores, 229 Hometown stores, over 1,400 catalogue and online merchandise pick-up locations, 96 Sears Travel offices and a nationwide repair and service network. 
 

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