In this article I will recap Sears' historical results, its latest EPS estimates vs. surprises, the latest news from the company, and the latest news from its closest competitors.
Recent EPS: Actual vs. Estimates
In the last quarter it reported a $0.31 loss per share, beating analyst estimates of a $0.67 loss.
The consensus EPS estimate is a $0.93 loss based on three analysts' estimates, up from a $1.27 loss a year ago. Revenue estimates are $9.63 billion, down from $10.33 billion a year ago. The median analyst target price for the stock is $22.50.
Average Recommendation: Underweight
- On May 17, 2012, Sears Holdings announced that the board of directors has approved plans to pursue a partial spin-off of interest in Sears Canada Holdings, which currently owns approximately 95% of the issued and outstanding common shares of Sears Canada. The company expects to distribute common shares of Sears Canada held by Holdings on a pro rata basis to holders of Holdings' common stock such that following the spin-off, Holdings will retain approximately 51% of the issued and outstanding common shares of Sears Canada.
- On May 1, 2012, Sears Holdings announced that for the first quarter of 2012, it expects net income from continuing operations attributable to the shareholders of between $155 million and $195 million (between $1.46 and $1.84 per diluted share from continuing operations). The above range includes approximately $400 million ($235 after tax and minority interest) of gains from the sale of certain U.S. and Canadian stores, which generated $440 million of proceeds, and adjusted EBITDA of $135 million to $195 million.
- On April 24, 2012, Sears Holdings announced the addition of a wholly owned subsidiary called MetaScale, a provider of technology managed services and data solutions.
- On April 17, 2012, Sears Holdings announced the completion of the sale of 11 Sears full line store locations to General Growth Properties for $270 million. Sears has received the sale proceeds and the stores will continue to operate as Sears locations into 2013 or 2014, with final closing dates to be determined and announced later this year.
- On Feb. 23, 2012, Sears Holdings announced that it intends to separate the Sears Hometown and Outlet Businesses and certain hardware stores through a proposed rights offering that is expected to raise approximately $400 million to $500 million.
- On Feb. 23, 2012, Sears Holdings announced a definitive agreement for the sale of 11 Sears full line store locations to General Growth Properties for a purchase price of $270 million.
Dollar Tree (NASDAQ:DLTR), Nordstrom (NYSE:JWN), Macy's (NYSE:M), Target Corp. (NYSE:TGT), and Wal-Mart (NYSE:WMT) are competitors for Sears. The table below provides the key metrics for these companies and the industry.
The chart below compares the stock price changes as a percentage for the selected companies for the last one-year period.
Competitors' Latest Developments
- On Aug. 9, 2012, Nordstrom announced that for fiscal 2012, it has raised earnings per diluted share to be between $3.40 and $3.50. According to I/B/E/S Estimates, analysts are expecting the company to report EPS of $3.45 for fiscal 2012.
- On Aug. 8, 2012, Macy's raised earnings guidance for fiscal 2012 to a range of $3.30 to $3.35 per diluted share, compared with previous guidance for earnings per diluted share of $3.25 to $3.30. Guidance for same-store sales in fiscal 2012 remains unchanged at an increase of approximately 3.7%. According to I/B/E/S Estimates, analysts were expecting the company to report EPS of $3.36 for fiscal 2012.
- On Aug. 2, 2012, Nordstrom announced that for the second quarter of 2012, it expects same-store sales to increase in the low-single-digit range.
- On July 5, 2012, Macy's reaffirmed fiscal 2012 guidance and expects same-store sales to rise by approximately 3.7%, with earnings per diluted share in the range of $3.25 to $3.30. According to I/B/E/S Estimates, analysts were expecting the company to report EPS of $3.37 for fiscal 2012.
- On July 5, 2012, Target announced that combined with the outlook for July, the company is on track to deliver second-quarter sales and adjusted earnings per share in line with the guidance provided at the time of the first-quarter earnings release.
- On June 13, 2012, Target announced that its board of directors declared a quarterly dividend of $0.36 per common share. The dividend is payable Sept. 10, 2012, to shareholders of record at the close of business Aug. 15, 2012.
- On June 12, 2012, The Economic Times reported that Wal-Mart plans to sever ties with companies that supply products to its stores if they are involved in any kind of corrupt practices, making it the first retail company to undertake such a stringent initiative in India.
- On June 11, 2012, Reuters reported that New York City's pension funds became the latest group to file a derivative lawsuit against Wal-Mart based on reported allegations of bribery in Mexico and a possible coverup by Wal-Mart officials.
- On June 6, 2012, Nordstrom announced that it is expecting roughly a 50% to 60% increase in sales for fiscal 2012.
- On June 6, 2012, Nordstrom announced that for fiscal 2012, it expects a 50% to 60% increase in sales. The company reported revenue of $9.31 billion for fiscal 2011.
- On May 18, 2012, Macy's announced that it declared a regular quarterly dividend of $0.20 per share on Macy's common stock, payable July 2, 2012, to shareholders of record at the close of business on June 15, 2012.
- On May 17, 2012, Dollar Tree announced that for the second quarter of 2012 it expects sales to be in the range of $1.66 billion to $1.70 billion, based on low- to mid-single-digit positive comparable-store sales and diluted earnings per share to be in the range of $0.87 to $0.93. For fiscal 2012, it expects sales to be in the range of $7.33 billion to $7.46 billion, based on a range of low- to mid-single-digit positive comparable-store sales and diluted earnings per share to be $4.74 to $4.94.
- On May 17, 2012, Wal-Mart announced that for the second quarter of 2013, it expects diluted earnings per share from continuing operations to range between $1.13 and $1.18. According to I/B/E/S Estimates, analysts are expecting the company to report EPS of $1.16 for second quarter of 2013.
- On May 16, 2012, Target announced that for the second quarter of 2012, it expects adjusted EPS of $1.04 to $1.14 and GAAP EPS of $0.94 to $1.04. For fiscal 2012, the company has raised its guidance by 5 cents and now expects adjusted EPS of $4.60 to $4.80 and GAAP EPS of $4.10 to $4.30. According to I/B/E/S Estimates, analysts were expecting the company to report EPS of $1.00 for the second quarter of 2012 and EPS of $4.29 for fiscal 2012.
The stock has a market capitalization of $5.39 billion and is currently trading at $50.67, with a 52-week range of $28.89 to $85.90. The stock's year-to-date performance has been 59.44%. It is currently trading below its 20-day, 50-day, and 200-day SMA.
Data sourced from Yahoo Finance, Google Finance, MarketWatch, Finviz, and Reuters.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.