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Holly LaFon
Holly LaFon
Articles (7929) 

Edward Lampert's Sears Announces Steeper Losses

August 21, 2014 | About:

HOFFMAN ESTATES, Ill, Aug. 21, 2014 /PRNewswire/ -- Sears Holdings Corporation (NASDAQ:SHLD) today announced financial results for its second quarter ended August 2, 2014. Net loss attributable to Holdings' shareholders was $573 million ($5.39 loss per diluted share) for the second quarter of 2014, compared to $194 million ($1.83 loss per diluted share) for the prior year second quarter. Adjusted EBITDA was $(313) million for the second quarter of 2014, compared to $(78) million in the prior year second quarter. As a supplement to this announcement, a presentation, pre-recorded conference and audio webcast are available at our website http://searsholdings.com/invest.

"We have continued to show progress in our transformation, as demonstrated by our year-over-year increase in online and multi-channel sales, and with our member sales now representing 73% of eligible sales," said Edward S. Lampert, Sears Holdings' Chairman and Chief Executive Officer. "However, our second quarter earnings are unacceptable and we are taking steps to address our performance on several levels. This includes reducing costs as we evolve our business model, investing in our Shop Your Way and Integrated Retail customer initiatives, rationalizing our physical footprint and improving pricing and promotions. As we move through the transformation, our new programs are becoming more prominent both in how we run the company and in how we serve our members, and we are pleased with how our members are responding."

Mr. Lampert continued, "As we progress with our transformation by investing in new programs and platforms, we continue to bear the costs of two promotional models, which adversely impacts margins. There is more work to be done to get results where we expect them to be. Like any transformation, we must first overcome the burden of the initial costs before we can enjoy the benefits. We have a large and valuable portfolio of assets that provide us with the flexibility we need to fund our transformation as we proactively work to return Sears Holdings to profitable growth and deliver shareholder value."

Second Quarter Updates:

Sears Full-line stores experienced comparable store sales growth of 0.1% for the quarter as compared to a decline of 0.8% in the second quarter of last year, despite the continuing impact of consumer electronics industry trends. Excluding the impact of consumer electronics, comparable store sales growth would have been 1.6%;

Kmart comparable stores sales were down 1.7% for the quarter as compared to a 2.1% decline last year, also despite the continuing impact of consumer electronics industry trends, as well as the impact of our grocery & household goods business. Excluding the impact of both, comparable store sales would have declined 1.0%;

Sales to Shop Your Way members in Sears Full-line and Kmart stores increased to 73% of eligible sales, up from 71% during the second quarter last year;

Online and multi-channel sales grew 18% over the prior year second quarter and 22% over the prior year first half;

We continue to evaluate our Sears Auto Center business, as well as our 51% interest in Sears Canada, including a potential sale of our interest or Sears Canada as a whole;

Continued with our inventory productivity efforts, with consolidated net inventory down approximately $620 million and domestic net inventory down approximately $510 million year-over-year, when excluding the impact of Lands' End inventory;

Reduced adjusted net consolidated debt year-over-year by $301 million, when including our unfunded pension obligation; net adjusted domestic debt on the same basis declined by $220 million;

Reduced net domestic short-term debt by $565 million, or 41%, from the prior year second quarter to $808 million;

Increased cash on hand on a consolidated basis to $839 million and domestically cash increased by $213 million to $596 million from the prior year second quarter; and
Total amount available to borrow under our revolving credit facilities was $486 million on a consolidated basis and domestic availability was $240 million, with net consolidated inventory of $3.9 billion and net domestic inventory of $3.5 billion, providing availability and financial resources of $5.2 billion on a consolidated basis and $4.4 billion on a domestic basis.

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Superguru1 - 3 years ago    Report SPAM

Not sure why is Eddie Lampert trying to turn around sears. Earlier I could understand real estate market was in dump. But what is he waiting for now. Any views on why?

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