The net loss was $170 million, or $1.58 a share, Sears said in a statement Thursday. That compared with a $16 million profit a year earlier.

Separately, Gap, the apparel chain, cut its full-year profit forecast by one-fourth as costs rose faster than expected.

Sales at Sears sank about 3 percent to $9.7 billion. Sears faces increasing competition from other department stores and discount chains. Target, which reported first-quarter results on Wednesday, said shoppers were staying cautious about spending.

“Our first quarter was adversely impacted by unfavorable weather, economic pressures facing our customers, and comparisons to last year’s government-sponsored stimulus program relating to the purchase of appliances,” Louis J. D’Ambrosio, Sears’s chief executive, said in the statement. “However, we also fell short on executing with excellence.”

Shares of Sears fell $1.99, or 2.6 percent, to $73.86.

Sears brought in Mr. D’Ambrosio in February after a three-year search for a chief. He told shareholders at the company’s annual meeting this month that Sears would expand services and technology to increase sales and understand customers better. The company also hired a new head of apparel, long a struggling unit, earlier this year.

Sales at stores open at least a year fell 5.2 percent at domestic Sears stores and 1.6 percent at its Kmart chain last quarter, with appliance, clothing and consumer electronics sales driving the decline.

Gap, meanwhile, said its fiscal 2011 profit would be $1.40 to $1.50 a share. Gap had previously forecast a maximum of $1.93 a share.

Expenses per unit will rise 20 percent in the second half, outweighing price increases, Gap said. The apparel industry is facing cost inflation for the first time in two decades because of surging cotton prices and increased pay for workers who make clothes in China and other parts of Asia. Retailers have said they plan to raise prices to counter the higher costs.

First-quarter net income fell 23 percent to $233 million, or 40 cents a share, in the period ended April 30, from $302 million, or 45 cents, a year earlier. Analysts projected 39 cents, the average of 28 estimates compiled by Bloomberg.

Same-store sales fell 3 percent in the first quarter at the chain’s Gap brand.

Gap has closed underperforming stores and shrunk other locations in the United States. The retailer is now looking overseas for sales growth by expanding into new regions in the past year, including China and Italy.

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