The company, 92 per cent owned by U.S. retail giant Sears Holdings Corp., said Wednesday that its net loss in the 13 weeks ended July 28 was $9.8 million or 10 cents per share.
That compared with a net loss of $200,000 or less than a penny per share in the similar 2011 period.
Revenue fell to $1.05 billion from $1.15 billion.
Meanwhile, the company says total revenues for the 26-week period ended July 28 were $1.97 billion, down 8.2 per cent from $2.14 billion for the 26-week period last year. And same-store sales, an important metric in the retail industry, were off 6.7 per cent.
"While we are not pleased with our quarterly sales results, we continued to implement key transformation initiatives," Sears Canada president and CEO Calvin McDonald said in a statement accompanying the results.
However, McDonald said the company has been encouraged by results from four stores in Ontario which received significant refreshes and re-opened at the end of May "to customer accolades."
"Of note was the performance in our apparel departments which received a significant portion of our investment. We are exploring other possible locations across Canada to refresh," he added.
"Also during the quarter, we continued to see sales increases of regularly priced merchandise in the Monday to Friday periods, supporting our price rebalancing initiatives begun in February of this year."
McDonald said the company also enjoyed sales increases in major appliances and mattresses, "two core hero categories which we have identified as key to our success."
The company has been pushing ahead with a revamp of its operations by cutting jobs, slashing prices and decluttering its stores in response to the entry of several new U.S. retailers into the Canadian market. It has also closed at least four stores in major cities over the past year.
Sears Canada has 196 corporate stores, 285 hometown dealer stores and more than 1,700 catalogue merchandise pick-up locations across Canada.