Sears Skyrockets 30% on New $1 Billion Cost Cuts
On Friday, shares of struggling retailer Sears Holdings SHLD) are skyrocketing, up around 32% to $7.33 per share in morning trading-and up nearly 44% in premarket trading -after the company announced a plan to cut costs by at least $1 billion in 2017.
The plan includes slashing debt and pension obligations by at least $1.5 billion, reducing overhead, improving merchandise at its stores, and bettering inventory management. Sears also hopes to more closely integrate its namesake and Kmart operations.
Edward S. Lampert, Sears' Chairman and CEO said, "We believe the actions outlined today will reduce our overall cash funding requirements and ensure that Sears Holdings becomes a more agile and competitive retailer with a clear path toward profitability."
"In addition, we believe these actions will enable us to focus our investments to drive our strategic transformation and the evolution of our Shop Your Way ecosystem through value enhancing partnerships, compelling offerings and a seamless online and in-store shopping experience for our members," Mr. Lampert continued.
Sears also announced that it amended an existing deal with its creditors that will allow it to borrow an additional $140 million, helping the retailer as to shutters more stores and tries to invest more in its online operations.
The once-great American department store has had a rough 2017 so far. In January, it announced plans to close 150 Sears and Kmart stores, and shares of SHLD have plummeted 40% year-to-date, hitting their lowest in recent days since Sears merged with Kmart in 2005 on bankruptcy fears.
Sears, however, isn't the only company facing troubles in a harsh retail landscape, begging the question, "Is 2017 the year of the retail famine?" Find out more in the latest episode of Zacks Shopping for Stocks. Listen below:
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>