Sears Holdings Corp. (SHLD, Financial) stock fell 34.77% between May 29 and June 1, marking the company's largest weekly loss in history. The retail store, which owns Sears and Kmart, plans to close 63 stores in the "near future."
The former retail giant lost 19% in value on Friday, marking its largest one-day drop since June 2015. The company's stock fell as much as 12.5% on Thursday, with a $424 million loss reported in the first fiscal quarter of the year.
Same-store sales continued to fall on the quarter, as revenue steadily declines. Sears blames store closures on over two-thirds of the company's revenue decline. Sears released its earnings report on Thursday, with the company initially claiming that it would be closing 72 stores in the coming months.
The number of stores slated for closure shrank later on Thursday, as the company claims that a few of the stores need to be reevaluated. The company claims to have identified 100 non-profitable stores that are a potential for future closures.
The company will close 48 Sears brand stores and 15 Kmart stores in 28 states. Store closures will begin in early September. There are also 40 auto centers, which reside in the company's Sears stores, that will close in June and late July.
Sears also closed 123 Sears and 303 Kmart stores in 2017. The holding company shuttered 67 Kmart and 41 Sears stores in the first 13 weeks of the year. Sears stock has fallen 70% in the trailing 12-month period.
Sears has been slow to adopt online shopping, as consumers opt to shop on Amazon (AMZN) and other online retailers.
The company's revenue fell 31.2% year-over-year in the first-quarter of the year. The company notes a combination of same-store sales decline of 11.9% and store closures for the drop in revenue. Kmart's comparable sales fell 9.5%, while Sears comparable sales fell 13.4%.
Kmart and Sears both posted positive sales in jewelry, footwear and apparel in the first quarter. Hardlines, which account for more than half of Sears' merchandise sales, suffered a massive drop in comparable sales.
Analysts claim that Sears' drop in appliance sales is troubling, as other retailers continue to experience double-digit growth in the segment. Lowe's (LOW) is the top appliance vendor, with the company also introducing Craftsman tools in its stores. Craftsman has long been available in Sears and its affiliates only, but Lowe's plans to introduce even more Craftsman products later in the year.
Adjusted earnings for Sears came in at -$225 million, with a net loss of $424 million on the quarter.
Sears raised $700 million in debt during the first quarter and sold nearly $290 in real estate. Debt is primarily being raised to fund pension contributions and is secured by real estate.
The company ended the quarter with $457 million in liquidity. Citigroup recently extended the company's credit card partnership with a $400 million extension. The extension will help the company attempt a turnaround in sales, with liquidity falling from $819 million last year to $457 million this year during the same quarter.
Disclosure: The author does not own any stakes in the listed equities.
