Sears Canada closures boost profit as sales drop
(Reuters) - Sears Canada Inc (SCC.TO: Quote) reported a first-quarter profit on Wednesday even as revenue slid, boosted by a gain on lease terminations from store closures announced in March.
Price cuts on more than 5,000 items, announced in February, held back revenue at the department store chain, majority-owned by Sears Holdings Corp (SHLD.O: Quote).
Revenue fell 7.8 percent to C$915.1 million, and sales at established stores, a key measure for retailers, fell 6.3 percent.
"Although not reflected in our top-line sales, there are positive signs of progress in many areas of our business," said Chief Executive Calvin McDonald in a release. "We are making progress on our transformation."
McDonald, who became chief executive in mid-2011, is almost a year into a three-year turnaround plan which includes refocusing on categories in which Sears is strongest.
McDonald said the major appliance and mattress businesses, two such categories, are both performing better than last year.
Net income for the quarter ended April 30 was C$93.1 million ($92.7 million), or 91 Canadian cents a share, compared with a loss of C$47.0 million, or 45 Canadian cents, a year earlier.
Earnings in the quarter included a gain of C$164.3 million on lease terminations of three stores. Sears said on March 2 it would shut three major downtown stores in Vancouver, Calgary and Ottawa.
($1 = $1.00 Canadian)
(Reporting by Aftab Ahmed in Bangalore and Allison Martell in Toronto; Editing by Frank McGurty)
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