Business
* Quarterly loss 86 cents/share in line with estimates
* Sales fall, miss Wall Street expectations
By Dhanya Skariachan
Aug 16 (Reuters) - Sears Holdings Corp, theretailer controlled by hedge fund manager Edward Lampert,reported a quarterly loss in line with Wall Street estimates onThursday as lower expenses offset weaker-than-expected sales.
The operator of Sears department stores and the Kmartdiscount chain blamed its lackluster sales in part on weaknessin the electronics, lawn and garden, and drug categories. Fewerapparel discounts also hurt sales, but helped earnings in thesecond quarter ended on July 28.
Sears Holdings has closed stores, tightly managed inventory,sold some real estate and spun off assets to become moreprofitable in recent quarters.
The company spun off its Orchard Supply Hardware Stores unitin December. In February, it announced plans to sell some primereal estate and spin off its Sears Hometown and Outletbusinesses and certain hardware stores. In May, it said it wouldspin off a large chunk of its stake in its struggling Canadianunit.
Credit Suisse analyst Gary Balter called the Canada spinoffanother example of a move "to what we believe is a liquidationof the Sears Holding Company."
In its second quarter, Sears' net loss narrowed to $132million, or $1.25 a share, from $146 million, or $1.37 a share,a year earlier.
Excluding pension and severance expenses and mark-to-marketgains, the loss was 86 cents a share, in line with analysts'estimates, according to Thomson Reuters I/B/E/S.
Sales fell 6.6 percent to $9.47 billion. Analysts hadexpected $9.63 billion.
Sales at U.S. stores open at least a year fell 3.7 percent,including a 2.9 percent decline at the company's namesakedepartment stores and a 4.7 percent fall at Kmart. Same-storesales at the Canadian arm, Sears Canada, fell 7.1percent.
Sears Holdings' struggles are well-documented. The company'ssales have fallen every year since 2005, when Lampert merged twoof America's iconic retail chains - Kmart and Sears Roebuck andCo - in an $11 billion deal.
The chain, home to brands such as Craftsman tools and Kenmoreappliances, is a victim of the weak economy and its ownmissteps.
Sears also faces cut-throat competition from the likes ofHome Depot Inc, Lowe's Cos Inc, Wal-Mart StoresInc, Target Corp, Best Buy Co Inc,J.C.Penney Co Inc, Macy's Inc and Kohl's Corp.
Analysts have said top shareholder and Chairman Lampert hadnot invested enough in Sears' retail operations, resulting indwindling sales. While Lampert has refuted such criticism, ablueprint he laid out in May to boost results included plans toinvest millions of dollars in a "Shop Your Way" rewards programand improving the layout and signs in the stores.
Earlier this week, Sears Canada reported a wider loss onweak sales.
