Sears Hometown and Outlet Stores, Inc (SHO) saw its loss widen to $21.43 million, or $0.94 a share for the quarter ended Apr. 29, 2017. In the previous year period, the company reported a loss of $3.57 million, or $0.16 a share. Revenue during the quarter dropped 16.53 percent to $448.23 million from $536.98 million in the previous year period. Gross margin for the quarter contracted 72 basis points over the previous year period to 20.92 percent. Operating margin for the quarter stood at negative 4.31 percent as compared to a negative 0.94 percent for the previous year period.
Operating loss for the quarter was $19.33 million, compared with an operating loss of $5.06 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at negative $8.70 million compared with $1.32 million in the prior year period. At the same time, adjusted EBITDA margin stood at negative 1.94 percent for the quarter compared to 0.25 percent in the last year period.
Will Powell, Chief Executive Officer and President, said, “The business environment in the first quarter was challenging for us. Continued hyper-competitive pricing in the home appliances category and unfavorable year-over-year spring weather conditions, which impacted the lawn and garden category, created a significant sales and margin headwind. Nevertheless overall sales performance showed improvement each month of the quarter, particularly as the lawn and garden category results began to improve in April with somewhat more favorable weather conditions."
Working capital drops significantly
Sears Hometown and Outlet Stores, Inc has witnessed a decline in the working capital over the last year. It stood at $193 million as at Apr. 29, 2017, down 25.15 percent or $64.85 million from $257.85 million on Apr. 30, 2016. Current ratio was at 1.87 as on Apr. 29, 2017, down from 2.12 on Apr. 30, 2016. Cash conversion cycle (CCC) has decreased to 41 days for the quarter from 88 days for the last year period. Days sales outstanding were almost stable at 2 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 48 days for the quarter compared with 94 days for the previous year period. At the same time, days payable outstanding was almost stable at 9 days for the quarter, when compared with the previous year period.
Debt increases substantially
Sears Hometown and Outlet Stores, Inc has witnessed an increase in total debt over the last one year. It stood at $93.70 million as on Apr. 29, 2017, up 192.81 percent or $61.70 million from $32 million on Apr. 30, 2016. SEARS HOMETOWN & OUTLET STORES has witnessed an increase in short-term debt over the last one year. It stood at $93.70 million as on Apr. 29, 2017, up 192.81 percent or $61.70 million from $32 million on Apr. 30, 2016. Total debt was 19.81 percent of total assets as on Apr. 29, 2017, compared with 5.07 percent on Apr. 30, 2016. Debt to equity ratio was at 0.38 as on Apr. 29, 2017, up from 0.08 as on Apr. 30, 2016. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]
