Sears Hometown And Outlet Stores Q4 Profit Down - Quick Facts

(RTTNews) - Sears Hometown and Outlet Stores Inc. (SHOS) reported preliminary, unaudited results for its fourth fiscal quarter ended February 1, 2014. Net income for the quarter decreased to $3.72 million or $0.16 per share, from $9.66 million or $0.42 per share in the same quarter last year.

Operating income decreased to $7.8 million in the fourth quarter of 2013 compared to $17.3 million in the fourth quarter of 2012. The $9.5 million decrease was primarily due to lower sales and a lower gross margin rate partially offset by lower selling and administrative expenses, and includes the impact of an estimated $3.1 million earned during the 53rd week of 2012.

Net sales in the fourth quarter of 2013 (13 weeks) decreased $28.7 million, or 4.5%, to $602.5 million from the fourth quarter of 2012 (14 weeks). This decrease was primarily due to sales of $36.5 million in the 53rd week of fiscal year 2012 and a comparable store sales decrease of 3.4% in the fourth quarter of 2013 compared to the fourth quarter of 2012. Partially offsetting these decreases were sales from new stores and higher initial franchise revenues (which were $10.8 million in the fourth quarter of 2013 compared to zero in the fourth quarter of 2012).

The comparable store sales decrease of 3.4% was comprised of a 4.0% decrease in Hometown and a 1.5% decrease in Outlet. The 3.4% decrease was primarily driven by lower consumer electronics sales following our planned exit from this category in most Hometown stores, lower tools-category sales in both segments, lower apparel sales in Outlet, and lower major appliance sales in Hometown. These decreases were partially offset by higher lawn and garden sales in Hometown and higher major appliance and furniture sales in Outlet. Excluding consumer electronics, same store sales decreased 1.0% in Hometown, 1.3% in Outlet, and 1.1% overall.