Multi-channel retailer Sears Canada, Inc. (SCC.TO) reported Wednesday a profit for the first quarter compared to a loss last year, reflecting a significant gain on lease terminations of three stores. Excluding the gain, the company would have reported a wider loss for the quarter.
"Although not reflected in our top line sales, there are positive signs of progress in many areas of our business," President and CEO Calvin McDonald said in a statement.
"In addition, the company has prudently managed expenses during the quarter resulting in operating expense reductions of 5.9% compared to the first quarter of last year," McDonald added.
The Toronto, Ontario-based retailer reported net earnings of C$93.1 million or C$0.91 per share for the first quarter, compared to a net loss of C$47.0 million or C$0.45 per share in the prior-year quarter.
The company said the results for the latest quarter includes a pre-tax gain of C$164.3 million on lease terminations of three stores as announced earlier.
Total revenues for the quarter decreased 7.8 percent to C$915.1 million from a restated C$992.5 million in the same quarter last year. Sales at established stores decreased 6.3 percent.
The revenue decline was attributable to reduction of merchandise offerings in non-strategic categories, lower sales and reduced promotional activity of clearance merchandise as well as reduction in catalogue pages and distribution.
Total-week net sales for the quarter were impacted negatively by the price rebalancing initiative.
"Balancing our value program has had a positive effect on our Monday to Friday sales, with weekday sales increasing and sales of our 'regular-priced' items in our full-line, Sears Home and hometown dealer stores up significantly compared to the first quarter of last year," McDonald noted.
Sears Canada operates currently through a network of 196 corporate stores, 278 hometown dealer stores, 29 home improvement showrooms, over 1,500 catalog merchandise pick-up locations, and 105 Sears Travel offices. It also has a nationwide home maintenance, repair, and installation network.
SCC.TO closed Tuesday's regular trading session on the Toronto Stock Exchange at C$13.15, up $0.55 on a volume of 6,200 shares.
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