Sears Canada gives big payout, one-time charge widens loss
(Reuters) - Struggling department store chain Sears Canada Inc (SCC.TO) is set to give a big payout to shareholders despite a bigger quarterly loss due to one-time charges related to restructuring and asset impairment.
Sears Canada shares rose as much as 18 percent on Tuesday morning on the Toronto Stock Exchange after the company announced the special dividend and reported its first rise in quarterly same-store sales since 2008.
The company is in the middle of a three-year turnaround plan, introduced in 2012 to boost sales and reclaim market share at a time when U.S. retailers such as Target Corp (TGT.N) are building up their presence in Canada.
The special dividend payment of C$5 per share, or C$509 million, reflected gains from recent asset sales and was largely expected by analysts.
The dividend will be payable on December 6 to shareholders of record as of December 2.
Sears Canada, 51 percent-owned by Sears Holdings Corp (SHLD.O), closed stores, sold real estate and shed assets in the third quarter ended November 2.
Excluding one-time charges, the company's expenses fell by 8.6 percent in the three months.
Adjusted earnings before interest, taxes, depreciation and amortization nearly doubled to $7.3 million.
Sales rose 1.2 percent at established stores, helped by strong sales of apparel, accessories and home products.
October was the company's strongest month in the quarter, said Chief Executive Doug Campbell, who took over from Calvin McDonald in September.
The Toronto-based company also sells baby care items and appliances such as coffee makers, blenders and microwaves. The company's private apparel brands include Jessica and Attitude.
Sears Canada's net loss widened to C$48.8 million, or 48 Canadian cents per share, in the third quarter, from C$21.9 million, or 22 Canadian cents per share, a year earlier.
The loss included a charge of C$42.8 million.
Sears Canada said this month that it would sell its 50 percent stake in eight Canadian properties for about C$315 million.
The company said in October that it would close its flagship downtown Toronto store and end the leases on four other locations in a C$400 million deal.
U.S. retailer Target opened its first Canadian stores in March and plans to have 124 by the end of the year.
Sears Canada shares were up 7 percent at C$17.98 on Tuesday on the Toronto Stock Exchange.
($1 = 1.04 Canadian dollars)
(Reporting by Garima Goel in Bangalore; Editing by Joyjeet Das and Kirti Pandey)
- Mexican train derails, stranding 1,300 migrants headed toward U.S.
- Israeli strikes kill more Palestinians; rocket causes huge blaze in Israel |
- Man suspected of shooting six dead in Texas to appear in court
- Four servicemen, five miners killed in eastern Ukraine |
- Obama tells Israel U.S. ready to help end hostilities