Sears Hometown & Outlet Stores (NASDAQ: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 (NASDAQ: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.
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“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.