Sears Holdings (SHLD) narrowed its fourth-quarter loss on Thursday as it executed on its restructuring and cost-cutting plan. Still, sales slid year-over-year on disappointing holiday sales.
The still struggling department store, which is in the middle of a massive restructuring, reported a fourth-quarter loss of $358 million, or $3.37 a share, compared with a year-earlier loss of $489 million, or $4.61.
Excluding one-time items, Hoffman Estate, Ill.-based Sears said it lost 96 cents a share, better than the $1.82 EPS loss forecast by analysts in a Thomson Reuters poll.
Selling and administrative expenses decreased by $669 million during the quarter, and the company said it continues to invest “hundreds of millions of dollars annually” on its overhaul and personalized “Shop Your Way” program.
Shares of Sears rallied 7.7% to $43.50 in early trading.
The consumer environment continues to be a problem for Sears and its peers, and the company said it was plagued with higher promotional and marketing costs.
"Our full year results are impacted during this transformation as we continue supporting traditional promotional programs and marketing expenditures,” Sears CEO Edward Lampert said in a statement.
Revenue for the three months ended Feb. 1 fell to $10.6 billion from $12.3 billion in the year-earlier period on a tough holiday season, though it was just ahead of the Street’s view of $10.57 billion.
Same-store sales, a key growth metric of sales at stores open longer than a year, declined 6.4%, accounting for $600 million of the sales decline. U.S. same-store sales have been positive so far in February.
Gross margins decreased by $681 million to $2.5 billion in 2013, heavily influenced by the steep sales decline and a weaker gross margin rate for both Kmart and Sears Domestic.
The company said it continues to explore “strategic alternatives” for its auto centers and Lands’ End business.