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Sears reports weak comps, issues FQ4 warning; shares -13.1% AH

  • Sears (SHLD) reports its FQ4 (ends Feb. 1) same-store sales were down 7.4% Y/Y as of Jan. 6. Sears Domestic comps were down 9.2%, and Kmart 5.7%. By comparison, Sears saw only a 3.1% same-store drop in FQ3 (4% for Sears Domestic, 2.1% for Kmart). (PR)
  • With those numbers on the books, Sears now expects to report adjusted FQ4 EPS of -$2.01 to -$2.98, well below a -$0.20 consensus. Consolidated adjusted EBITDA is expected to be in a range of -$65M to $65M.
  • The retailer notes it has "continued with traditional promotional programs and marketing expenditures while investing in [its] member-centric model," and says these actions have impacted its margins and expenses.
  • Sears had $1B in cash as of Jan. 4, not counting C$300M in pending proceeds from a Sears Canada real estate sale, and $2.3B available via credit facilities. FQ4 results are due on Feb. 27.

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Comments (29)
  • Micah
    , contributor
    Comments (483) | Send Message
    Not a single comment on the release from the CEO....pathetic.
    9 Jan 2014, 04:39 PM Reply Like
  • markrpat
    , contributor
    Comments (227) | Send Message
    Oh, but there was a release...He paid out fund redemptions in $SHLD stock. At least he gave them a week to sell it before the announcement today.
    9 Jan 2014, 05:18 PM Reply Like
  • Bouchart
    , contributor
    Comments (803) | Send Message
    What is there to say? It stinks!
    9 Jan 2014, 05:56 PM Reply Like
  • Indejay1
    , contributor
    Comments (23) | Send Message

    9 Jan 2014, 04:51 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1718) | Send Message
    It's all fluff.


    Having an increasing %age of SYW members doesn't tell you much.


    You can have an existing (or shrinking) member base where more and more of them "convert" to ShopYourWay (b/c Sears does bigger price differences for SYW members vs. non, so everyone just signs up for SYW), but that doesn't mean growth.


    If you have an increasing member base AND a higher %age are joining SYW, then that is meaningful. Of course, the quarterly change in the member base is never released (because it would very likely show consistent decline)
    9 Jan 2014, 05:36 PM Reply Like
  • BTM
    , contributor
    Comments (420) | Send Message
    Can we conclude that Eddie Lampert doesn't know shit about retailing?


    I thought so.
    9 Jan 2014, 04:58 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1718) | Send Message
    Long live Ayn Rand.
    9 Jan 2014, 05:28 PM Reply Like
  • chummybeagle
    , contributor
    Comments (119) | Send Message
    “There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged . One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.”
    9 Jan 2014, 10:29 PM Reply Like
  • mobyss
    , contributor
    Comments (2190) | Send Message
    Not good.


    It's time for a major consolidation in the big-box retail space.


    Sears, JCPenney, Macy's, Bed Bath Beyond, Best Buy, Pier 1, Lowe's, Kohl's, K-mart, and many others. Online sales are just taking the US consumer away, if they are buying anything at all (with no jobs).


    Apparently even Target is starting to see a weaker consumer. And Walmart is losing customers to dollar stores.
    9 Jan 2014, 04:59 PM Reply Like
  • Energysystems
    , contributor
    Comments (1413) | Send Message
    Brick & mortar is going the way of print(and I'm the son of a printer!). There will always be a market, but it will be a much smaller market.
    9 Jan 2014, 05:34 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (9719) | Send Message
    Although the brick and mortars are getting killed I still like Pier 1 here.
    9 Jan 2014, 06:20 PM Reply Like
  • Randal James
    , contributor
    Comments (3486) | Send Message


    I watch retail a lot but rarely invest because I usually wind up on a day like today being long Sears. But there does seem to be a disconnect between certain specialty retailers, such as Pier, and the broader mass merchants. All I can say is to stay on top and try and watch the comps of the nearer competitors for signs of weakness because it is rarely isolated. I suppose the other thing, surely true for any purchases, is to only buy when you feel the shares are a good value. Often when there is a lot of discouraging news (and this might be a quarter with really soft guidance), the whole sector sells down and creates at least a few % of gain you would otherwise miss. Makes a handy cushion in case the market is sluggish.
    9 Jan 2014, 06:35 PM Reply Like
  • positivethoughts
    , contributor
    Comments (2011) | Send Message
    The Fed has created this mess. With the Fed and their increasing money supply, no one can get a good return on savings. Therefore, there arent any savings. Without savings, there is no investment. Without investment, there is no growth and innovation, and eventually, no production.
    We have become a nation of retailers and retail customers.You would think this predicament would be good for Sears, but Sears and even Walmart, is losing their North American customer base. Everyone is either on disability, food stamps, social security etc.
    9 Jan 2014, 10:50 PM Reply Like
  • Randal James
    , contributor
    Comments (3486) | Send Message
    Gee positive, you might rethink that moniker...


    We should all remember that in the younger days of retailing, there were local department stores, that were usually expensive but with nice goods. There were fancy department stores in major cities, such as Denver, where you might go to The Denver Dry Goods store or the May D & F {my Father used to say it was Denver and 'Frisco}. And then there were the Sears and Penneys and Kresges that were called "five and dime" stores even though the relevance of that probably stopped after the depression. The thing that broke apart this structure was discounting. And it did not begin with Wal Mart.


    But Walmart and Target and Amazon have done their damage on the landscape. Huge retail stores like Kohls with perhaps 10 employees and millions in inventory add to the mix. No one dreamt you could give customers so little service and they would ever return.


    It is true that the US is a consumer economy like no other. That is why our manufacturing has left - we demanded cheaper undies or faucets and got them! That has nothing to do with the Federal Reserve, by the way, and you abuse yourself and others by suggesting as much.


    This country - and I must assume like most of the audience you are an American - has had ups and downs but never the despair of the plague or the pure devastation of two World Wars. There have been stupid excesses in government in every administration in every decade and every century. When the world did not appreciate the United States, it was often to their sad surprise that they were wrong. The Russians, the Germans, our pals the Brits... when it really comes down to crunch time, we can unite and deliver.


    So when you apparently - and excuse me for being direct - whine of the current state, I ask you to look around. The last catastrophe was largely of our own making and we've recovered OK, not great, not bad. It has highlighted the weaknesses of many other nations. We will help, as is our nature to do, but the country we call home will embrace our economic challenges and move on - as always. Strength to strength.
    10 Jan 2014, 02:22 AM Reply Like
  • chopchop0
    , contributor
    Comments (3950) | Send Message
    "Walmart is losing customers to dollar stores."


    They are fighting back with express and market stores with smaller SF.


    They have actually been holding their own.
    10 Jan 2014, 09:22 AM Reply Like
  • positivethoughts
    , contributor
    Comments (2011) | Send Message
    No recovery has taken place. More debt, more mal-investment, and a bigger bubble forming. Watch out for Japan.
    10 Jan 2014, 10:25 AM Reply Like
  • Hendershott
    , contributor
    Comments (1619) | Send Message
    Positive...the Fed didn't create this mess, Eddie created it. He's all about fooling around with the real estate and cutting costs (service and merchandise), doesn't know anything about retail. I've been going there for decades, it just gets worse all the time.
    10 Jan 2014, 12:46 PM Reply Like
    , contributor
    Comments (206) | Send Message
    Well, it really looks like the next JCP, shorts appear to be right. Very sad for me.
    At least I have no position
    9 Jan 2014, 05:03 PM Reply Like
  • omarbradley
    , contributor
    Comments (966) | Send Message
    "hire the guy who fixes the thing." that would be my advice. just there over the weekend..."no parts, no service." that would be for the products that have their brand name on it "and i'm not talking the F-35 Lightning II" either.
    9 Jan 2014, 05:32 PM Reply Like
  • The_Hammer
    , contributor
    Comments (4299) | Send Message
    when the inevitable downturn comes again. RIP retail.
    9 Jan 2014, 05:49 PM Reply Like
  • Dude Ray
    , contributor
    Comments (20) | Send Message
    There is a bit of a silver-lining. $1B cash on hand vs. $607M at the end of Q3 even after all this. Not ready to call it quits yet. Maybe I'll go down with the ship.
    9 Jan 2014, 06:32 PM Reply Like
  • chummybeagle
    , contributor
    Comments (119) | Send Message
    I will go down with this ship
    And I won't put my hands up and surrender
    There will be no white flag above my door
    9 Jan 2014, 10:33 PM Reply Like
  • TAS
    , contributor
    Comments (2510) | Send Message
    Really now, folks.


    Is this mess a surprise to anyone?
    9 Jan 2014, 11:36 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1718) | Send Message
    Ayn Rand can fix it. Wherefore art thou Ayn?
    9 Jan 2014, 11:52 PM Reply Like
    , contributor
    Comments (4633) | Send Message
    Is Sears Holdings, the hedge fund, really losing money. They have over a billion dollars in cash which increased from the 3 Quarter. Here are only 2 of their 30 subsidiaries., and


    If they are losing money then Amazon is a mess.


    10 Jan 2014, 09:19 AM Reply Like
    , contributor
    Comments (206) | Send Message
    MFS do some work and find out why cash has increased, maybe they are selling more assets.
    10 Jan 2014, 10:18 AM Reply Like
    , contributor
    Comments (206) | Send Message
    MSF, why do you think AMZN is moving higher and SHLD is moving lower?
    if nothing else, the market sees AMZN as an increasingly good business design, SHLD as a poor
    business model, simple explanation, but if you don't get what AMZN is doing you ought to rethink your investing strategies, if in fact you have any. Maybe is it? good luck.
    10 Jan 2014, 10:17 AM Reply Like
    , contributor
    Comments (206) | Send Message
    Sears turnaround efforts unlikely to succeed, says Credit Suisse
    Credit Suisse believes that Sears' earnings continue to be shockingly bad, and the firm believes that suppliers are starting to become concerned about the retailer. The firm adds that Sears is reducing the value of its assets by $10-$14 per share each year it continues to operate. Credit Suisse keeps an Underperform rating on the stock.


    10 Jan 2014, 11:00 AM Reply Like
  • jasonrothman1
    , contributor
    Comments (127) | Send Message
    What have they done with the billion dollars they recently borrowed?
    10 Jan 2014, 12:34 PM Reply Like
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