Sears reported mounting losses on Thursday and acknowledged that the company has “fallen short” of expectations for a recovery.
The company said revenue fell 12.5% to $5 billion in the third quarter, with losses widening to $748 million from $454 million in the period last year.
Same-store sales dropped 7.4%, including a 10% decrease at Sears stores and a 4.4% decrease at Kmart stores.
Sears’ cash and equivalents fell 12% to $258 million in the period.
The company said it would continue to accelerate store closings to help stop the bleeding.
Sears is shutting down 64 Kmart stores this month, following the closing of nearly 80 Sears and Kmart stores in July.
“We understand the concerns related to our operating performance,” Jason Hollar, Sears’ chief financial officer, said in a prerecorded conference call. “We have fallen short on our own timetable for achieving the profitability that we believe the company is capable of generating. With that said, the team remains fully committed to restoring profitability to our company and creating meaningful value.”
Neil Saunders, the CEO of the retail consulting firm Conlumino, likened Sears to the Titanic on Thursday, saying it “looks set to sink.”
In a note to clients, he said the company’s plan to restore profitability is a sham, writing, “the funds raised are not being used to develop of growth the firm – they are being used to prop up an ailing and failed business.”
“In our view, it is now too late to turn this around,” Saunders wrote. “It is just not financially feasible to reverse it.”
Addressing widespread speculation about a potential Sears bankruptcy, Hollar reiterated on Thursday that the company has a “rich asset base” to draw from to stay in operation.
“We believe that our liquidity needs will be satisfied through the foreseeable future using the levers available to us through our portfolio of assets,” Hollar said.
The company is still looking for options such as the sale or licensing of several of its key brands and its Home Services business.
“We have had strategic parties express interest in our Kenmore, Craftsman, and DieHard brands, and our Home Services business, and we continue to evaluate opportunities for these businesses,” Hollar said.
Sears reported earnings Thursday one week after losing two of its highest-ranking executives in the midst of the key holiday shopping season.
The outgoing executives include Jeff Balagna, formerly Sears’ executive vice president, and Joelle Maher, formerly Sears’ president and chief member officer.
Sears’ sales have dropped from $41 billion in 2000 to $15 billion in 2015. Kmart, which merged with Sears in 2005, has seen its sales in the same period plunge to $10 billion from $37 billion.
As Business Insider reported last month, at least half a dozen suppliers have “significantly” reduced product shipments to Sears over fears of a bankruptcy, according to Marc Wagman, the executive vice president of trade credit and political risk at the insurance brokerage firm Arthur J. Gallagher & Co., which represents the Sears suppliers to insurers.
The companies’ concern over Sears’ financial health has “really accelerated in the last six to 12 months,” Wagman told Business Insider.
According to a recent report by The Wall Street Journal, the toymaker Jakks Pacific Inc. recently suspended sales of its products to Kmart, which is owned by Sears Holdings, because of worries about the company’s financial health.
Suppliers have grown concerned after warnings from Sears store employees and numerous banks.
Fitch Ratings in October identified Sears as one of seven major retailers at risk of going bankrupt in the next 12 to 24 months and eventually liquidating.
In September, Moody’s analysts downgraded Sears’ liquidity rating, saying Sears and Kmart didn’t have enough money – or access to money – to stay in business.
The Moody’s analysts said Sears was bleeding cash and would have to continue to rely on outside funding or the sale of assets, such as real estate, to sustain operations. Kmart in particular is at risk of shutting down, the analysts said.
Sears CEO Edward Lampert responded in early October, saying “there have never been any plans to close the Kmart format.”