Sears Blames Slumping Sales for 1Q Loss

Hoffman Estates, Ill. Sears Holding Corp. reported a $56 million first-quarter loss Thursday. It blamed the fact that consumers were spending more of their money to cover the rising costs of gas and food.

These factors affected all of the company’s divisions. Sears store sales dropped 9.8% domestically, while Kmart stores sales slumped 7.1%. Total domestic same-store sales declined 8.6%.

"Our first-quarter results reflect the difficult economic environment and intense competition for consumer business," said W. Bruce Johnson, Sears Holdings' interim CEO and president. "That said, since May 3 our sales declines have moderated somewhat."

Especially hard hit were sales of home appliances and products for lawn and garden care. Clothing sales also slumped. The company also reported that it expects that tough economic conditions will cause its sales and margins to struggle for the rest of the year.