A slow housing market, rising energy costs and increased competition were some of the factors that attributed to a 3.4 percent decline in first quarter sales at Sears Domestic and a 4.4 percent sales decline at Kmart’s comparable stores, Sears Holdings reported.
Total revenues for the first quarter declined $.3 billion, or 2.5 percent, to $11.7 billion, compared to $12 billion for last year’s first quarter. The decline was partially offset by sales increases within Sears’ Lands’ End and home services businesses, the company reported. Kmart suffered the largest sales decline for the quarter, where revenues declined $239 million or 4.6 percent, Sears Holdings reported. The quarter was made up of a 13-week period ended May 5, 2007. Despite the sales drops, Sears Holdings reported an increase in net income to $216 million, up from $180 million for last year’s first quarter.
“In part, our domestic operating results reflect the impact of some of the same challenges being faced by our customers, such as rising energy costs and a slower housing market,” said Aylwin Lewis, Sears Holdings’ chief executive officer and president. “However, as an organization, we need to overcome these factors by better controlling costs and developing innovative solutions that better meet our customers’ needs and allow us to generate a more reasonable level of profitability even in the face of such challenges.”