Sears Hometown & Outlet Stores (SHOS) said Friday its first-quarter profit tumbled 27% as colder weather drove down sales of lawn and garden products.
The company, which has a market value of about $1.2 billion, was spun off by Sears Holdings (SHLD) in October. Dealers and franchisees operate 1,253 small but generally profitable stores, which sell home appliances, hardware and tools, as well as lawn and garden equipment that saw weaker demand during a cooler-than-usual spring.
“Sales were below last year due to the impact of unseasonably cool weather in February and March,” Chief Executive Bruce Johnson said in a statement. “Same-store sales of lawn and garden, our second-largest category, were down 45% in the first two months.”
In the latest quarter, Sears Hometown & Outlet recorded a $15 million profit versus $20.6 million a year earlier. On a per-share basis, earnings checked in at 65 cents, down from 89 cents.
Sales dropped 3.2% to $601.1 million. Same-store sales fell 5% overall, led by a 6.9% decline at Hometown, which sells lawn and garden products. Outlet saw a 1.2% increase in comparable store sales.
Gross margin widened to 25.7% from 25.6%.
Shares were down 1.2% at $51.87 in late morning trading, recovering a bit from heavier losses earlier. As of Thursday’s close, the stock was up about 61% on the year.