Sears Holdings Corp. reported Monday, August 3, 2015, that a key sales figure fell sharply in the second quarter, particularly dragged down by weakness at its namesake stores. Excluding that enterprise, gross sales at shops open at the least a yr fell 9.1 %, with a 5.four % decline at Kmart shops and a 12.5 % drop at Sears places.
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Sears completed the spinoff 235 of its properties into a real-estate investment trust, Seritage Growth Properties, in July in a move to raise cash. “She will work closely with me and our business unit leaders to lead our iconic Sears brand in its continued transformation as an integrated retail format”.
Sears said it expects an adjusted loss before interest, taxes, depreciation and amortization of $189 million to $249 million, which would be the fourth quarter of improvement on earnings on that basis.
“Sears and its stockholders would receive a severely inadequate cash payment that the defendant Lampert-controlled company may use to cover operating losses and debt obligations for another year or so, before stockholders are left holding the bag in an insolvency widely viewed as inevitable if the proposed transaction occurs”. The remaining $900 million would be deferred and recognized over the term of the leases.
The company expected its net income in the range of around $155 million to $205 million or approximately $1.46 to $192 per diluted share including the gain and tax benefit, but excluding final accounting adjustments for the period. This is the second consecutive quarter in which comps posted a double-digit decline. According to Retail Metrics data, Sears has not posted positive same-store sales results since first quarter 2010.
Sears, controlled by Eddie Lampert, will report on Aug. 20 results for the second quarter ended Aug. 2. Spinning off its assets to the REIT for $2.7 billion, has been one of the CEO’s tactics to reverse the decline in profits.
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Now what: Sears also disclosed some financial retooling and an amended credit facility, and outlined some progress on the company’s transformation into a membership-driven shopping club.
