|Sears Canada Inc - SCC.t is a retailer, headquartered in Toronto, Ontario.|
It operates in all provinces and territories of Canada with a network of 146 corporate stores (Sears, Sears Home, Sears Outlet/Fashion Outlet), 144 Hometown Dealer stores, 84 Sears Travel offices and a nationwide home maintenance, repair, and installation network.
Second Quarter 2016 Operational Highlights
Same Store Sales. Same store sales decreased by 5.5% compared to the same quarter last year and core retail same store sales2 decreased by 6.2%. Same store sales declines were due in part to (1) a decrease in transactions in big ticket items such as major appliances, due to the loss of customer financing solutions with the termination of the credit card agreement3 and (2) lower than expected sales performance of new merchandise programs negotiated in Spring of 2015 for launch in Spring of 2016.
Adjusted EBITDA. Adjusted EBITDA was a loss of $66.1 million for the quarter this year. Excluding (a) the impact of the termination of the credit card agreement, (b) the effect of a weaker Canadian dollar, and (c) the launch costs of Initium, Adjusted EBITDA would have improved by approximately $11.6 million.
Cost Reductions. Completed $128 million of annualized cost reductions as of the second quarter, above the original 2016 annualized target range of $100 to $127 million in reductions. Currently working towards further reductions in order to reach the upper end of the higher 2016 annualized target range, announced last quarter, of $127 to $155 million. In order to drive necessary revenue growth, the Company plans to invest some of the savings in new businesses and categories with high return opportunities.