Sears Q2 Profit Falls Short Of Estimates On Weak Sales

August 28, 2008 8:33 p.m. EST

Chicago, IL - Sears Holding Corp. reported a 62 percent decline in second quarter earnings on Thursday as revenue fell on weak same-store sales.

The retailer posted second quarter earnings of $65 million or 50 cents a share, compared to $173 million or $1.15 a share in the same period a year earlier. Revenue fell to $11.8 billion, down 4 percent from last year.

Excluding one-time items, Sears earned 21 cents a share, short of the 33 cents a share that analysts were expecting, according to Reuters Estimates.

Total same-store sales fell 6.2 percent with sales at Sears stores down 6.7 percent and sales at Kmart down 5.6 percent.

"Our second-quarter results reflect the continued effects of a slowing economy, which contributed to the earnings declines we have experienced since the third quarter of 2007," said president and CEO Bruce Johnson, according to Reuters.

Gross margin fell to 26.5 percent from 27.7 percent last year. The decline was mainly due to markdowns as the company tries to reduce product inventory levels.

Sears said it expects full-year earnings to be comparable with last year's results.