Sears outperforms expectations
HOFFMAN ESTATES, Ill. (AP) – Sears Holdings Corp. expects its fourth-quarter and fiscal year adjusted profit to come in sharply above last year’s results on strength at its Kmart chain – a sign fortunes may be improving for the long-struggling retailer.
The news sent its shares up in premarket trading Thursday.
Sears and its discount sister Kmart, both led by financier Edward Lampert, have seen shoppers flee to larger rivals with more prestige and more products at better prices. But late last year, glimmers of resilience began to emerge.
On Thursday, Sears predicted a profit between $1.61 and $2.29 for the year that ends in a little more than three weeks. That excludes the impact of store closings, impairment and restructuring charges and mark-to-market gains and losses on hedge transactions made by Sears Canada.
Last year Sears reported earnings of $1.55 per share.
For the fourth quarter ending Jan. 30, Sears anticipates an adjusted profit in a range of $3.36 to $4.06 per share. That’s sharply above the $2.65 per share analysts surveyed by Thomson Reuters expect. Those estimates generally exclude one-time items.
Meanwhile, the retailer said Kmart continued to show signs of life during the critical holiday season, helping Sears Holdings post a slight increase in a key sales figure for December.
The merchant, based in the Chicago suburb of Hoffman Estates, reported a 0.4 percent rise in sales at stores open at least a year for the period ended Jan. 2.
It was largely helped by a 5.3 percent increase in sales at Kmart stores open at least a year, where shoppers snapped up toys, home goods and clothing at the discount chain.
Sears typically doesn’t release monthly sales results. Sales at stores open at least a year are a key indicator of retailer performance since they measure growth at existing ones.
Kmart began to show a glimmer of hope during the third quarter, when sales at stores open at least a year edged up less than 1 percent. While the improvement was small, it was the first time in at least seven years that the sales figure increased at the chain’s stores.
Sears shares climbed $5.12, or 5.8 percent, to $93.99 in premarket trading after closing Wednesday at $88.87.
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