Shares of Sears Holdings Corp., the retailer controlled by hedge-fund manager Edward Lampert, fell the most in more than 10 months Friday after the company posted a wider third-quarter loss and its 23rd consecutive quarterly sales decline.
Sears fell 19 percent to $47.49, the biggest decline since Dec. 27. The Hoffman Estates, Ill.-based company’s shares had more than doubled through the close of regular trading Thursday.
The third-quarter net loss widened to $498 million, or $4.70 a share, from a loss of $421 million, or $3.95, a year earlier, Sears said Thursday in a news release. Sales dropped 5.8 percent to $8.86 billion, continuing a streak of declines that began in 2007.
“Sears is in a very weak operating condition and is not well positioned to recover,” Matt McGinley, a managing director at International Strategy & Investment Group in New York, wrote in a note Thursday. He recommends selling the shares.
Chief Executive Officer Lou D’Ambrosio has worked to lower inventory and other costs while expanding shopper loyalty and layaway programs to try to revive sales. More than half of the sales in the quarter, which ended Oct. 27, came from loyalty-program customers, he said on a conference call. The revenue decline was due mainly to having fewer Kmart and full-line Sears stores in operation, the company said.
Sears cut inventory levels by $972 million from a year earlier, excluding its spun-off unit, and is headed toward an increase of $1.8 billion in liquidity, D’Ambrosio said.
D’Ambrosio, who took over in 2011 as Sears’s fourth CEO since Lampert merged the retailer and Kmart in March 2005, has added iPads for salespeople and wireless service in stores and as part of a push toward upgrading the company’s technology. Online sales in the quarter grew more than 20 percent, he said.
Sears has been selling stores and other assets after reporting a $3.1 billion loss last fiscal year. Last month, it completed the spinoff of its smaller-format Hometown, Hardware and Outlet stores, raising $346.5 million from its rights offering and a $100 million cash dividend from Sears Hometown. The new company is called Sears Hometown & Outlet.