Earnings Preview: Sears Holdings

Sears Holdings (SHLD) is expected to report Q2 earnings Thursday, Aug. 28 before market open.

Guidance

Analysts are looking for a profit of 33c on revenue of $11.71B. The consensus range is (4c) to 79c for EPS, and revenue of $11.5B to $11.95B, according to First Call.

Additional Info

The company recently announced that Maureen McGuire, its Chief Marketing Officer, resigned; Richard Gerstein, senior vice president, will take over for McGuire. Additionally, Stu Reed, the former head of Motorola's (MOT) mobile devices business, will become senior vice president of the company's home services unit and Guenther Trieb will be in charge of the Craftsman, Diehard and Kenmore brands.

In May, Sears reported a much wider-than-expected Q1 loss of (53c) vs. First Call consensus of 15c, and because of the tough economic environment, analysts are expecting Q2 to be similar. The company is currently looking to reduce costs and is dealing with weak sales as a result of decreased spending on discretionary items as well as soaring food and gas prices, limited credit, slumping home prices and worries about jobs. Instead of spending at department stores, consumers are flocking to wholesale clubs and discount apparel chains. Sears is also in the process of separating its operations into five types of units in an effort to allow the units to operate more efficiently. 

Comments

[Newswatcher5:]

Does anyone ever get tired of seeing this same old quarterly story coupled with almost desperate speculation on what "miracles" will be wrought by Mr. Lampert in order to try to justify all the hype these same publications were spewing about him up until about a year ago?

Sears has been suffering same store sales declines for years now. For a while after he stepped in, Mr. Lampert was able to provide some return solely through cost cutting and tight fisting, at first enough to offset the sales and market share losses.

Alas for him, this is not a sustainable business model... sooner or later you run out of cuts to make and ways to hang the bottom line on the backs of your employees.

Now the time has come when there's nothing left to cut and there's a need to try to figure out how to get back all those sales and some of that market share he frittered away pretending to have a plan that was going to work.

Unfortunately, the emperor's new clothes, at least in the form of Mr. Lampert's radical makeover of the retail industry look suspiciously like an empty suit.

Mr. Sullivan, if you read this, don't be drinking coffee. ;)

2008 Aug 27 01:27 PM

[billddrummer:]

Poor quarterly results, to go along with all the others:

www.bloomberg.com/apps...

Not worth investing in, long or short term.

2008 Aug 28 10:11 AM