There is no crying in baseball or whining in big business. Sears CEO Aylwin Lewis said, regarding the company’s 99% drop in earnings in the last quarter: "We are very disappointed in our performance for the third quarter. We cannot blame our results entirely on the retail and macro-economic environments."
With the company’s stock down 14% to under $100, a 52-week low, Lewis may be more than disappointed. He may be fired. Sears controlling shareholder Eddie Lambert already looks the fool for his investment in the retailer and another recent purchase of stock in Citigroup (C). His reputation is on the line now and Lewis holds the future of that reputation in his hands.
But, perhaps not for long.
At $100, shares in Sears will be down 40% for the year. Shares in Wal-Mart (WMT) are flat for the year. The same holds true for Target (TGT). Costco (COST) is up 20% for the period.
The reason that these other stocks have done well is because their earnings have dropped, but not collapsed. They have managed expenses better. Same store sales are up some. At Sears they are running off 4%.
The economy is not what is killing Sears. Management is.
Douglas A. McIntyre
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