With a finger on the pulse of today’s shopper, Guru Edward Lampert has a gift for making retailers relevant to the ever-changing consumer. His retail re-visioning of Sears and Kmart is starting to pay off. Sears Holdings Corporation’s online businesses for Sears and Kmart grew 20% in the second quarter of 2013, year-over-year. Lampert’s brainchild, the Sears ‘Shop Your Way’ membership program, generated more than 65% of the revenues at Sears Domestic and Kmart during the second quarter, compared to around 55% in the same quarter a year ago. But despite e-commerce growth, Sears Holdings reported an operating loss of $51 million in the second quarter of 2013, after a loss of $103 million in the second quarter of 2012.
Here’s an update on company financials and the billionaires trading Sears.
Sears Holdings Corporation (SHLD)
Up 6% over the past12 months, Sears Holdings Corporation has a market cap of $6.05 billion; its shares were traded at around $58.47 with a P/B ratio of 2.70.
Sears Holdings Corporation operates a national network of stores with 2,019 full-line and 54 specialty retail stores in the United States operating through Kmart and Sears and 475 full-line and specialty retail stores in Canada operating through Sears Canada Inc., a 51%-owned subsidiary. The company also operates a number of websites under the sears.com and kmart.com banners, offering more than 60 million products. Incorporated in 2004 for the merger of Sears and Kmart in 2005, Sears Holdings Corporation is the parent company of Kmart Holding Corporation and Sears, Roebuck and Co.
Guru Action: As of June 30, 2013, there are nine guru stakeholders and active insider trading.
Top stakeholder and chairman and CEO of Sears Holdings, Edward Lampert holds 31.8% of shares outstanding, or 33,856,069 shares as of the end of second quarter, earning a gain of 19.3%. He last traded in the first quarter of 2013, selling 2,478,112 shares at an average price of $47.09 for a 26.4% gain.
After buying and selling out a number of times in his five-year history, Jim Simons made a new buy of 14,191 shares in the second quarter. He paid an average price of $49.89, for a gain of 19.3%.
As of June 30, 2013, Steven Cohen sold out his position, unloading 5,757 shares at an average price of $49.89, for a gain of 19.3%. Cohen is letting go after mixed results in 12 quarters of history.
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While the Sears online business is growing in the second quarter of 2013, its Kmart store sales declined by 2.1%, Sears Domestic is down by 0.8% and Sears Canada down 2.5%. Sears Holdings reported its financial results for the second quarter of 2013, with a net loss of $194 million, compared to $132 million in the same quarter a year ago. Second quarter revenues and comparable store sales revenues were $8.9 billion for the quarter ended August 3, 2013, compared to revenues of $9.5 billion for the same quarter a year ago. The separation of Sears Hometown (SHOS) in the third quarter of 2012 decreased company revenue by approximately $195 million. The company reported adjusted EBITDA of ($55) million for the second quarter of 2013, down from $116 million in the same quarter of 2012. The net loss attributable to Sears Holdings' shareholders is $1.83 loss per diluted share, compared $1.25 loss per diluted share, in the same quarter a year ago. In the second quarter, the company’s gross margin decreased $345 million to $2.2 billion, according to a company press release.
Edward Lampert, Sears Holdings Corporation's chairman and CEO, commented in a company press release:
We made meaningful progress this quarter in our transformation to a member-centric company. Shop Your Way members represented over 65% of our sales and they redeemed rewards points at a significantly higher rate than last year. While the increase in Shop Your Way promotional activity and member redemptions resulted in a meaningful increase in our costs, it demonstrates that our members are deepening their engagement with our program which will allow us to further accelerate our transformation…At the same time, we recognize how important it is to improve the profitability of our company and I am disappointed that we did not deliver a better result.
A man of many hats, Edward Lampert, CEO of Sears Holdings Corporation and founder of ESL Investments, has a portfolio of 4 stocks with a total value of $2.9 billion.
Study the rest of Edward Lampert’s portfolio.
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