Retailer Sears Holdings Corp posted stronger-than-expected quarterly results on Thursday as it cut costs during the recession, and said it was closing 24 additional stores.
The company controlled by hedge fund manager Edward Lampert reported net income of $190 million, or $1.55 a diluted share, for the fourth quarter ended January 31, compared with $426 million, or $3.17 a share, a year earlier.
The results included special items. Sears said it had costs of $74 million tied to store closings, including $29 million related to the previously announced shuttering of eight stores.
Excluding items, profit came to $2.94 a share, compared with $2.68 a share expected by analysts, according to Reuters Estimates.
As consumers clamp down on spending in the face of rising unemployment and reduced access to credit, Sears has been cutting costs and inventory levels as sales suffer at its Kmart and Sears, Roebuck stores.
The retailer announced the closure of 28 stores during 2008 and on Thursday said it had decided to close 24 additional stores in January. A pretax charge of $45 million was recorded in the fourth quarter from that move, and another charge of about $24 million is expected to be taken during the first half as those stores wind down.
Revenue fell 12 percent to $13.3 billion in the fourth quarter. U.S. sales at stores open at least a year fell 8.3 percent, with Kmart down 5 percent and Sears, Roebuck off 11 percent.
The company said Kmart, which has benefited from increased layaway sales to cost-conscious shoppers, increased its adjusted earnings before interest and taxes from the prior year.
Selling and administrative expenses fell 10 percent in the quarter and gross margin was 27.5 percent of sales, compared with 27.7 percent a year earlier.
The Hoffman Estates, Illinois, company, which bought back 2.9 million shares during the fourth quarter, had cash of $1.3 billion as of January 31, compared with $1.6 billion a year earlier.
It said it reduced short-term borrowings on its $4 billion revolving credit line to $435 million as of January 31 from $1.9 billion at November 1, 2008.
The new store closures include outlets in Florida, Ohio and Indiana.
(Reporting by Karen Jacobs; Editing by Lisa Von Ahn and Gerald E. McCormick)