Sears Holdings Corporation (SHLD) saw its loss widen to $748 million, or $6.99 a share for the quarter ended Oct. 29, 2016. In the previous year period, the company reported a loss of $454 million, or $4.26 a share. On the other hand, adjusted net loss for the quarter widened to $333 million, or $3.11 a share from a loss of $305 million or $2.86 a share, a year ago.
Revenue during the quarter dropped 12.54 percent to $5,029 million from $5,750 million in the previous year period. Gross margin for the quarter contracted 282 basis points over the previous year period to 19.13 percent. Operating margin for the quarter stood at negative 12.41 percent as compared to a negative 6.64 percent for the previous year period.
Operating loss for the quarter was $624 million, compared with an operating loss of $382 million in the previous year period.
However, the adjusted operating loss for the quarter stood at $429 million compared to operating loss of $412 million in prior year period.
Edward S. Lampert, Holdings' chairman and chief executive officer, said, "We remain fully committed to restoring profitability to our Company and are taking actions such as reducing unprofitable stores, reducing space in stores we continue to operate (including through the Seritage lease arrangement), reducing investments in underperforming categories and improving gross margin performance and managing expenses relative to sales in key categories. While many observers have acknowledged the significant asset base of our Company, we understand the concerns related to our operating performance and are committed to transforming our Company through our Shop Your Way membership program and our Integrated Retail investments. At the same time, we will continue to explore options to recognize the inherent asset value in a manner that complements our transformation."
Working capital drops significantly
Sears Holdings Corporation has witnessed a decline in the working capital over the last year. It stood at $236 million as at Oct. 29, 2016, down 66.33 percent or $465 million from $701 million on Oct. 31, 2015. Current ratio was at 1.04 as on Oct. 29, 2016, down from 1.11 on Oct. 31, 2015.
Cash conversion cycle (CCC) has decreased to 27 days for the quarter from 81 days for the last year period. Days sales outstanding were almost stable at 8 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 56 days for the quarter compared with 114 days for the previous year period. At the same time, days payable outstanding went down to 36 days for the quarter from 41 for the same period last year.
Debt increases substantially
Sears Holdings Corporation has witnessed an increase in total debt over the last one year. It stood at $4,299 million as on Oct. 29, 2016, up 49.22 percent or $1,418 million from $2,881 million on Oct. 31, 2015. Total debt was 39.57 percent of total assets as on Oct. 29, 2016, compared with 22.56 percent on Oct. 31, 2015.
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