HOFFMAN ESTATES, IL—Sears Holdings Corp. said Monday it expects to report an improved financial position when it announces second-quarter results on August 20, thanks largely to its sale of assets to spin-off REIT Seritage Growth Properties. The financially challenged retailer continued narrowing its losses during Q2, although it expects to report a 10.6% year-over-year decline in same-store sales for the quarter ended July 25, its second consecutive quarter of double-digit declines.

SHLD on July 7 sold 235 properties to Seritage in a sale-leaseback as well as its 50% share of joint ventures with General Growth Properties Inc., Simon Property Group and the Macerich Co., for gross proceeds of $2.7 billion. The company expects to realize $1.4 billion in net proceeds from the sale, with $510 million reported for Q2 and the balance deferred and recognized over the lease terms.

Also during Q2, SHLD completed an amendment and extension of its $3.275-billion domestic credit facility with approximately $2 billion maturing in 2020 and the remainder in place until April of 2016. “This represents a significant milestone and provides the company with a credit facility consistent with our needs, given our reduced reliance on inventory as a source of financing,” according to SHLD's announcement.

"We have substantially enhanced our financial flexibility and achieved our objective of reducing our reliance on inventory as a source of financing," according to SHLD's announcement Monday. The company intends 'to continue taking significant actions to alter our capital structure, as circumstances allow, to position Holdings for success and profitability, which could include further reductions in debt or changes in the composition of our debt."

SHLD said that absent its consumer electronics business, the Y-O-Y sales declines would have narrowed to 9.2%. The company on Monday described its consumer electronics line as “a business we are altering to meet the changing needs of our members.”