clear
Tuesday May 24th, 2016 1:51PM

Sears sales slump during holiday season

By The Associated Press
NEW YORK (AP) -- It was an ugly holiday season for Sears.<br /> <br /> Sears Holdings Corp.'s shares plummeted in after-hours trading Thursday after the beleaguered retailer said it expects a hefty loss for the fourth quarter and full year as sales during the critical holiday season dropped sharply.<br /> <br /> The retailer, which operates Sears and Kmart stores, said that it expects an adjusted loss between $213 million and $316 million, or $2.01 to $2.98 per share, for its fourth quarter. For the year, it forecast an adjusted loss between $811 million and $914 million, or $7.64 to $8.61 per share.<br /> <br /> Two analysts surveyed by FactSet had expected a profit of 38 cents per share for the fourth quarter and a loss of $6.80 for the year, on average.<br /> <br /> The retailer, based in Hoffman Estates, Ill., also said its Kmart and Sears chains combined had a 7.4 percent drop in revenue from stores open at least a year for the nine-week period ended Jan. 6. For Sears Canada, that figure was down 4.4 percent. This decline in a key measure, which strips away the impact of recently opened or closed stores, was sharper than in the third quarter.<br /> <br /> The dismal results raise more questions about the retailer's future as it faces mounting pressures from other nimbler rivals like Wal-Mart that have lured shoppers away for years. It also underscores the heavy pressure that Eddie Lampert, hedge fund billionaire and Sears' chairman and CEO, faces to turn around the business. Lampert engineered the combination of Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy.<br /> <br /> To improve its business, Sears is shifting away from its focus on running a store network into a business that is members-focused, where its most loyal shoppers receive incentives to buy. The company once again blamed that transition for weighing on results as it continues to do traditional promotions while investing in its membership loyalty program called Shop Your Way. But it said it was confident it would work in the long run.<br /> <br /> At the same, time, Sears has been trying to restore profitability by cutting costs, reducing inventory and selling off some assets and spinning off others. Last month, Sears announced it will spin off its Lands' End clothing business as a separate company by distributing stock to the retailer's shareholders.<br /> <br /> "The results that we posted are not nearly what we want them to be," said Lampert in a blog that he posted on the company website. "They also overshadow all of the work that's being done by our associates, our vendors and the other businesses we work with, along with everyone who is developing better ways for us to serve our members."<br /> <br /> Sears said that Shop Your Way members accounted for 69 percent of its sales in the nine-week period ended Jan. 4, up from 58 percent in the year ago period.<br /> <br /> Analysts, however, said that the latest results show shoppers are not buying the membership strategies.<br /> <br /> "Clearly, he is fully committed to the (membership strategy), but it's clear that it has not gained enough momentum to make up for the losses that are happening," said David Tawil, co-founder and portfolio manager of Maglan Capital, which follows distressed companies.<br /> <br /> In particularly, Tawil noted that Sears' earnings before interest, taxes, depreciation and amortization - an approximate measure of a company's operating cash flow - in the critical fourth quarter was particularly disturbing.<br /> <br /> Sears said that it expects what's known as EBITDA would be anywhere between a loss of $80 million and a gain of $20 million. That compares with a gain of $365 million for last year's fourth quarter.<br /> <br /> By division, Kmart had a 5.7 percent drop, while Sears stores in the U.S. suffered a 9.2 percent drop for the quarter to date.<br /> <br /> The company said it expects to release final results for the fourth quarter and full year in late February.<br /> <br /> Sears Holding Corp. shares fell 13 percent, or $5.77, to $36.80 in after-hours trading after closing down more than 3 percent, or $1.40 to $42.57 in regular trading.<br />
© Copyright 2016 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Judge denies motions to move, delay Tsarnaev trial
Lawyers for Boston Marathon bombing suspect Dzhokhar Tsarnaev asked a federal appeals court Wednesday to overturn a judge's decision to not move his upcoming trial out of state.
10:02PM ( 1 year ago )
High court to adopt electronic filing of cases
The Supreme Court is belatedly developing an electronic filing system similar to those used in courts around the country, Chief Justice John Roberts said Wednesday in his annual end-of-year report.
7:57PM ( 1 year ago )
Storm brings snow, cold to West for New Year's
A blustery winter storm dumped snow and ice across the West on Wednesday, making driving treacherous in the mountains from California to the Rockies and forcing residents and party-goers in some usually sun-soaked cities to bundle up for a frosty New Year's.
5:19PM ( 1 year ago )
U.S. News
State DOT awards $48M contract for NE Ga. road project
The state Department of Transportation has awarded a $47.8 million contract for nine miles of work on a northeast Georgia road.
9:37AM ( 1 year ago )
Business News
Grass fire impacts rush hour traffic on 985
Rush hour traffic on I-985 was slowed by a grass fire Wednesay afternoon with one lane closed while firefighters fought the blaze.
10:19PM ( 1 year ago )
Hall County conviction, sentencing to be reviewed by SCOGA
The State Supreme Court has agreed to hear the appeal of a Hall County man when they reconvene in January.
2:37PM ( 1 year ago )
Maysville man dies from Banks County wreck
The Georgia State Patrol reports that alcohol and/or drugs were factors a single-vehicle wreck that claimed the life of a Maysville man in Banks County Tuesday night.
11:07AM ( 1 year ago )
Local/State News
Amid shouts of 'shame,' House GOP defeats gay rights measure
Democrats shouted "shame," but House Republicans switched their votes and defeated a measure to protect gay rights
8:03PM ( 4 days ago )
CDC director Freiden warns GOP Zika bill is inadequate
The head of the Centers for Disease Control and Prevention warned Wednesday that a House GOP measure to combat the Zika virus is inadequate to deal with the swelling threat to public health
7:36PM ( 5 days ago )
Trump unveils list of his top picks for Supreme Court
Donald Trump, the presumptive Republican nominee for president, released Wednesday a list of 11 potential Supreme Court justices he plans to vet to fill the seat of late Justice Antonin Scalia if he's elected to the White House.
3:31PM ( 5 days ago )
1st US penis transplant could bring hope to maimed soldiers
A 64-year-old cancer patient has received the nation's first penis transplant, a groundbreaking operation that may also help U.S. veterans maimed by roadside bombs
8:04PM ( 1 week ago )
States dig in against directive on transgender bathroom use
Politicians in Texas, Arkansas and elsewhere are vowing defiance over the Obama administration's new directive on transgender bathroom use
9:19PM ( 1 week ago )