NEW YORK » Sears posted a smaller loss in the fourth quarter from a year ago as it reduced its inventory and expenses while sales at its namesake stores rose slightly.

But investors weren’t pleased, sending shares down $2.47 per share, or 5.2 percent, to close at $45 on Thursday. Overall, the company’s results show it continues to face an uphill battle to turn itself around.

The results come as the struggling retailer, which operates Sears and Kmart stores, announced last month that its chairman, hedge fund billionaire Edward Lampert, will take over the role of CEO. He succeeds Louis D’Ambrosio, who left this month because of family health matters. Investors had been queasy about the move as they worry whether Lampert would continue the investment that D’Ambrosio has made to improve the shopping experience.

In his annual letter to investors, Lampert sought to ease worries on Wall Street by promising the company will continue to invest in technology, bolster its online operations and make other changes. But he also blamed Sears’ woes on the seismic changes in buying behavior in the digital era.

"We are living in a hyper-connected world. (Customers) want to get what they want when they want it and where they want it — on their own terms,"’ he said. "To win the game, we have to change the game. We not only need to adapt, we need to lead and stay ahead of the curve. As we look ahead, we know we still have a lot of work to do," he noted. "It will not be easy times, but we will take bold actions to get through it."

Lampert has a tough road ahead. He engineered the combination of Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy.

Still, the company has posted six straight years of declines in revenue at stores open at least a year. While Sears’ middle-income shoppers has been hit hard by the economy’s woes, critics have long said the company hasn’t done enough to invest in its stores to compete with Wal-Mart Stores Inc., Target Corp. and other competitors.

In his note to investors, Lampert sought to answer his critics, noting the company has invested "selectively in our better performing stores without throwing good money … in our poor performing stores."

"Observers have mistakenly concluded that our issues were primarily related to underinvesting in our stores," Lampert wrote. "If it were just about store investment, then Best Buy would be thriving after the demise of Circuit City, Barnes & Noble would be thriving after the demise of Borders and other retailers who made significant store investments would be thriving instead of struggling to chart a new course."

The company lost $489 million, or $4.61 per share, for the period ended Feb. 2. That compares with a loss of $2.4 billion, or $22.63 per share, a year earlier.