Sears profit drops 62% as sales fall

Beleaguered retailer Sears Holdings Corp. reported a hefty drop in fiscal second-quarter profit as sales slumped, despite a restructuring aimed at drawing back shoppers who’ve taken their checkbooks elsewhere.

The company led by financier Edward Lampert also delivered a downbeat outlook, predicting that sales and gross profit margins will face continued pressure from the sluggish economy.

Hoffman Estates, Ill.-based Sears said it earned $65 million, or 50 cents a share, in the quarter that ended Aug. 2, down 62% from a profit of $173 million, or $1.15, a year earlier. Excluding the effect of the reversal of a $62-million reserve item, earnings were 21 cents a share for the second quarter.

Revenue fell to $11.76 billion from $12.26 billion a year earlier. Same-store sales, or sales at stores open at least a year, dropped 6.2% in the U.S. Same-store sales are considered a key indicator of a retailer’s health.

Analysts surveyed by Thomson Reuters expected earnings of 33 cents a share on revenue of $11.7 billion. Those estimates typically exclude one-time items.

Sears shares rose $3.64, or 4.2%, to $90.62.