Sears Canada posts Q1 net loss as its revenues hit by bad weather

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TORONTO - Sears Canada Inc. is reporting a higher first-quarter net loss of $75.2 million on lower revenues that the department store chain says were impacted by unseasonable weather.

Total revenues for the 13-week period ended May 3, was $771.7 million compared with $867.1 million year-over-year.

Sears Canada (TSX:SCC) says it earned 74 cents per share in the quarter, compared with a net loss of $31.2 million, or 31 cents per share, in the same quarter of 2013.

The company said the net loss included pre-tax expenses of $7.6 million primarily related to severance costs. Also included in net loss for the quarter were pre-tax lease exit costs, warranty and other costs related to such things as the future settlement of retirement benefits, totalling $11.2 million.

Sales in stores that were open for at least a year decreased by 7.6 per cent year-over-year.

"The unseasonable weather had an adverse effect on our revenues," said Douglas Campbell, president and CEO.

"Sales of spring merchandise were below last year, as winter-like weather was prevalent in most parts of the country well into the new season with cooler temperatures and significantly more snow in many areas," Campbell said in a news release on Wednesday.

Sears Canada also said revenues were affected by such factors as store closures.

U.S.-based Sears Holdings has said it's considering selling its 51 per cent interest in Sears Canada.

Sears Canada's board and management have said they plan to fully co-operate with Sears Holdings in the process.

Sears Canada has said it's not interested in stocking high-priced runway styles and lavish decor and is aiming for middle-class shoppers.

It's in the midst of a three-year turnaround plan that intensified when the company began a more aggressive reduction of staff aimed at lowering expenses.

Over the past year, Sears Canada has sold leases to some of its most prominent locations.

Organizations: Sears Canada Inc., TSX, Sears Holdings

Geographic location: TORONTO

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