Sears Holdings shares surged more than 20 percent in after-hours trading Thursday after the struggling retailer posted its smallest same-store sales decline in more than three years.
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The Illinois-based company said same-store sales fell 3.9 percent in its second fiscal quarter of 2018. Broken down by segment, sales fell 4 percent at Sears store locations and 3.7 percent at Kmart locations.
The decline was much smaller than Sears Holdings experienced in the same period one year ago, when same-store sales fell more than 11 percent. Same-store sales actually rose 3 percent in July and 2.5 percent in August, the company said in a press release.
"As we enter the second half of 2018, we remain focused on identifying additional opportunities to streamline operations and reduce operating expenses while staying focused on our Best Members, Best Categories and Best Stores,” said Edward Lampert, Sears’ chairman and CEO. “We have a responsibility to explore opportunities to unlock the full potential of our assets for our shareholders, including third-party partnerships or the sale of our businesses.”
Sears has shuttered dozens of stores in recent months in a bid to trim operating costs after several years of major sales declines. Like many big-box retailers, Sears has struggled to maintain store traffic amid the rise of e-commerce and digitally-savvy competitors such as Amazon and Walmart.
The company is attempting to sell its Kenmore appliance segment as part of its cost-cutting strategy. Lampert, who is also the company’s largest shareholder, has offered to buy the business for $400 million through his hedge fund.
Sears shares initially plunged 9 percent during the day after the company failed to report quarterly earnings before the market’s opening bell as scheduled. Companies rarely miss their scheduled earnings announcements.