Sears quarterly profit falls 47.5 percent

The retailer controlled by hedge fund manager Edward Lampert said earnings fell to $426 million, or $3.17 a share, in the fourth quarter ended on February 2, from $811 million, or $5.27 a share, a year earlier.

Revenue fell to $15.07 billion from $16.18 billion.

Sales at stores open at least a year fell 4.5 percent companywide, with declines of 4 percent at U.S. Sears stores and 5.2 percent at Kmart.

Higher markdowns to clear excess inventory hurt gross margin, which fell to 27.7 percent from 29.7 percent a year earlier.

Sears Holdings, which is searching for a chief executive and seeking to reorganize its operations, warned in mid-January that quarterly profit would decline.

The Hoffman Estates, Illinois, retailer competes against a host of chains, including J.C. Penney Co in clothing and Wal-Mart Stores and other discounters in general merchandise. Home Depot and Lowe's Cos have chipped away at Sears' dominant market share in appliances.

Some Sears executives have departed recently. Last week, the company said two longtime employees, one of which headed up its key appliance division, had retired.

(Reporting by Karen Jacobs; Editing by Lisa Von Ahn)