CHICAGO (AP) -- Hefty charges and poor results at its U.S. stores led Sears Holdings Corp. to post a bigger-than-expected loss for the third quarter on Tuesday, and the struggling retailer withdrew its operating profit outlook because of the nation's recession.
The suburban Chicago-based company, led by financier Edward Lampert who is the retailer's chairman, also boosted its stock buyback plan by $500 million to $572 million.
Sears lost $146 million, or $1.16 per share, during the three months ending Nov. 1. That compares with a profit of $4 million, or 3 cents per share, in the same period last year. Excluding a hefty charge related to 14 store closings and gains on Sears Canada hedges, Sears posted a loss of 90 cents per share in the latest period.
Revenue dropped more than 8 percent to $10.66 billion from $11.62 billion as the company's Sears department store's comparable sales slid 10.6 percent in the U.S. Same-store sales at Kmart, the company's discount brand, slipped 7 percent. Total same-store sales, or sales at stores open at least a year, a key retail industry metric, fell 9 percent.
Analysts surveyed by Thomson Reuters expected a much smaller loss of 49 cents per share on higher revenue of $10.93 billion.
Sears said it will take a pretax charge of $21 million in the fourth quarter related to the closing of eight underperforming stores. The company said it will continue to evaluate additional store closings or divestitures, remodels, acquisitions and stock and debt repurchases to boost its financial flexibility.
Meanwhile, Sears withdrew its forecast for earnings before interest, taxes, depreciation and amortization, citing the severe economic slowdown.
In August, the company had said EBITDA in the second half of the year would exceed 2007 levels, but full-year results would be comparable year-over-year. However, the forecast had assumed flat to modest same-store sales declines in the third and fourth quarters, but third-quarter same-store sales ended up falling off sharply and in November, domestic Sears and Kmart same-store sales dropped a combined 8.7 percent.
Year to date, adjusted EBITDA totaled $722 million, less than half the $1.52 billion reported as of Nov. 30, 2007.
Aside from closing underperforming stores, Interim Chief Executive and President W. Bruce Johnson said in a statement that Sears has prepared for a challenging holiday season by cutting inventory and reducing expenses. The company also began promoting layaway programs at Kmart and resurrected the program at Sears locations to provide consumers with another payment option. Layaway programs enable customers to make small payments toward the purchase over a set period of time.
"We believe we have positioned ourselves well for a difficult holiday shopping season," Johnson said.
Sears, whose proprietary brands include Kenmore and Craftsman, repurchased 1.4 million shares during the quarter. The Hoffman Estates-based retailer had about 123.6 million shares outstanding as of Nov. 28. The retailer runs about 3,900 stores in the U.S. and Canada.
Sears shares were unchanged in pre-market trading Tuesday at $31.84.
The company also said Tuesday that Scott Freidheim, formerly chief administrative officer at Lehman Brothers Holdings Inc., will be its new executive vice president of operating and support businesses. Sears also said former Banana Republic executive Nick Coe has been appointed the president of Lands' End.