The parent, Sears Holdings Corp , disclosed the sales figures late on Monday as it announced in a statement that its chief executive would step down. Its shares rose 2.3 percent before regular trading hours on Tuesday.
It also said it expected the company as a whole to show higher adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in its fiscal fourth quarter.
But the retailer expects all of the improvement to come from its domestic business, as it sees Sears Canada's fourth-quarter adjusted EBITDA falling by about half.
Results at Sears Canada were hurt by weaker earnings from electronics, as well as "unseasonably warm temperatures in parts of Canada," the company said.
Sears Canada is struggling to turn around its business ahead of U.S. discount retailer Target Corp'sCanadian launch this spring, expected to shake up the retail landscape.
Chief Executive Calvin McDonald has said his turnaround plan - which in part involves refocusing on the company's stronger categories such as mattresses and major appliances - is working, albeit more slowly than expected.
In the third quarter to October 27, Sears Canada same-store sales, a key measure for retailers, dropped 5.7 percent, following a 7.8 percent decline in the same quarter a year earlier.
In November, Sears Holdings trimmed its stake in the Canadian unit from about 95 percent to 51 percent, distributing the stock to Sears Holdings shareholders.
(Reporting by Allison Martell; Editing by Andrea Ricci)