Sears Holdings Corporation
) reported first-quarter fiscal 2013 adjusted loss per share of
$1.29 per share, substantially widening from the year-ago
quarter's loss per share of 51 cents. Quarterly results also
compared unfavorably with the Zacks Consensus Estimate of 84
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Including special items, the company's reported loss reached
$2.63 per share compared with a loss per share of $1.78 posted in
the prior-year period.
Revenues inched down 8.8% to $8,452 million compared with $9,270
million in the year-ago quarter, primarily due to separation of
Sears Hometown and Outlet business, reduction in the number of
Kmart and Sears's full-line stores in operation during the
quarter as well as lower comparable store sales. Sales also
missed the Zacks Consensus Estimate of $10,028 million by a
Segment wise, sales at Sears Domestic dipped 8.7% to $4,507
million, while Kmart sales declined 9.1% to $3,103 million.
Moreover, sales at Sears Canada registered a decline of 8.2% to
The company witnessed a 3.6% decline in Domestic comparable store
sales, primarily attributable to cooler-than-usual spring weather
across most parts of the country. On the other hand, Sears Canada
reported comparable store sales decline of 2.6% during the
On the domestic front, comps at the company's Kmart stores fell
4.6% while Sears Domestic saw a 2.4% downside. The decline at
Kmart was driven by weak performance at most categories with
grocery & household, pharmacy and drugstore on the forefront.
Comps at Sears Domestic mostly suffered due to weather-related
declines in the lawn & garden category, as well as declines
in consumer electronics and tools categories, offset by increases
in the apparel and home categories.
Adjusted gross profit declined 31.4% to $2,164 million compared
with $2,408 million reported in the first quarter of fiscal 2012.
Consequently, gross profit margin contracted 40 basis points to
25.6%. The company's adjusted selling and administrative expenses
declined 3.4% to $2,172 million, primarily due to lower payroll
and advertising expenses.
Adjusted loss before interest, tax and depreciation in first
quarter fiscal 2013 stood at $8 million, substantially below the
adjusted EBITDA of $160 million earned in the year-ago comparable
quarter. Adjusted operating loss came in at $184 million compared
with a loss of $31 million in the year-ago quarter.
Balance Sheet and Cash Flow
Sears Holdings ended the quarter with cash and cash equivalents
(including restricted cash) of $471 million and long-term debt
and capitalized lease obligations of $1,929 million compared with
a cash balance of $609 million and long-term debt and capitalized
lease obligations of $1,943 million at the end of the year-ago
quarter. The decline in cash balances during the quarter was
mainly attributed to the elevated working capital requirements at
Sears Canada. The company's shareholder equity stands at $2,921
million as of May 4, 2013.
Other Stocks to Consider
Sears Holdings currently holds a Zacks Rank #3 (Hold). Other
stocks worth considering in the retail-wholesale space are
Big 5 Sporting Goods Corp.
). All these stocks hold a Zacks Rank #1 (Strong Buy).