U.S. same-store sales rose 0.1% in the first quarter with sales falling 1.7% at Kmart stores. Excluding the impact of collapsing sales of consumer electronics, same-store sales would have risen by 1.6% corporatewide and 1% at Kmart stores.
Eddie Lampert, Sears’ chairman and CEO, said:
[O]ur second quarter earnings are unacceptable and we are taking steps to address our performance on several levels. This includes reducing costs as we evolve our business model, investing in our Shop Your Way and Integrated Retail customer initiatives, rationalizing our physical footprint and improving pricing and promotions. As we move through the transformation, our new programs are becoming more prominent both in how we run the company and in how we serve our members, and we are pleased with how our members are responding.
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Sears has already spun off its Hometown stores and its Lands’ End business. The company continues to try to sell its 51% interest in Sears Canada, which it says has a market value of $765 million as of August 19. Who knows how far it has fallen since then. The Sears Auto Center business is also on the block, but based on what the company said Thursday morning there appear to be few if any prospective buyers.
Sears did not provide guidance in its earnings press release, but the consensus estimate calls for a third-quarter EPS loss of $3.60 on sales of $7.64 billion. In the third quarter of last year, the company posted an EPS loss of $3.13 on sales of $8.27 billion. Both estimates for the current quarter seem optimistic given prior results. And if more pieces of Sears are sold off, the bits that are left won’t interest many investors. The stock will get bludgeoned Thursday.
Sears traded down about 5.7% in Thursday’s premarket session, at $33.91 in a 52-week range of $31.26 to $67.50. The consensus price target from Thomson Reuters is $20.00, from just two analysts who even care anymore.
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