CHICAGO – Sears, Roebuck and Co. (S) on Thursday reported quarterly profit that was well below Wall Street expectations because of poor spring clothing sales, and forecast weaker-than-expected full-year results.
Shares of the largest U.S. department store chain fell 5.5 percent in trading before the New York Stock Exchange opened on Thursday morning.
Hoffman Estates, Ill.-based Sears said it earned $53 million, or 24 cents per share, in the second quarter ended July 3, compared with $309 million, or $1.04 per share, in the same period a year earlier.
Earnings for the latest quarter include charges of 24 cents per share for severance costs and depreciation. Excluding those one-time items, analysts, on average, expected a profit of 71 cents per share, according to Reuters Estimates.
"Like much of the industry, we experienced weak demand in June," Chairman and Chief Executive Alan Lacy said in a statement. "That, combined with the overhang of our spring apparel assortment and inventory issues, resulted in a disappointing quarter."
Sears has been under intense pressure to convince Wall Street that it can thrive without the credit card operations that it sold to Citigroup (C) late last year. The finance operations had generated a large chunk of Sears' profits.
For the full year, Sears forecast earnings in the range of $2.66 to $2.86 per share. Analysts, on average, expected $3.65 per share, according to Reuters Estimates.
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