SEARS HOLDINGS REPORTS 7.1% SALES DECLINE IN FOURTH QUARTER

Sears Holdings Corporation has reported its revenues decreased $796 million to $7.3 billion for the fourth quarter of 2015, compared to revenues of $8.1 billion for the prior year fourth quarter. Comparable store sales declined 7.1% during the quarter, comprised of decreases of 7.2% and 6.9% at Kmart and Sears Domestic, respectively, and accounted for $458 million of the year-over-year revenue decline, while $291 million of the revenue decline was due to having fewer Kmart and Sears Full-line stores.

For the full year, revenues decreased approximately $6.1 billion to $25.1 billion in 2015 as compared to revenues of $31.2 billion in the prior year, with a majority of the decline related to actions taken by the company to streamline operations and focus on our transformation into a member-centric retailer. The decrease in revenue included a decrease of $2.1 billion associated with Sears Canada, which was de-consolidated in October 2014, $222 million from the separation of the Lands’ End business, which was completed in the first quarter of 2014, and $1.5 billion less revenue as a result of fewer Kmart and Sears Full-line stores. For the full year, domestic comparable store sales declined 9.2%, comprised of a decrease of 7.3% at Kmart and a decrease of 11.1% at Sears Domestic, which contributed to $2.0 billion of the revenue decrease relative to the prior year.

“While our fourth quarter comparable store sales were improved over the prior three quarters and January 2016 was our best monthly comparable store sales performance of the year (-4.5%), the unseasonably warm weather and the associated competitive promotional environment resulted in higher than expected markdowns and significantly lower gross margin in our key apparel categories,” said Edward S. Lampert, Holdings’ chairman and CEO. “As we head into 2016, we remain committed to restoring Sears Holdings to profitability. Generating positive Adjusted EBITDA is our most important area of focus, and to that end, we plan to accelerate our transformation into a leading member-centric integrated retailer and take action, where necessary, to optimize our cost structure and improve our gross margin realization.”