Sears Reports Q2 Profit

Sears Holdings Corp SHLD reported a profit in the second quarter on Thursday. The Hoffman Estates, Illinois-based company posted quarterly net profit of $208 million, or $1.84 per share, versus a year-ago loss of $573 million, or $5.39 per share. Excluding non-recurring gains, the company lost $2.40 per share, versus a year-ago loss of $2.76 per share. Its total revenue declined 22.5 percent to $6.21 billion. However, analysts were expecting a loss of $2.50 per share on revenue of $5.72 billion. Comparable store sales slipped 10.8 percent in the quarter. Sears Domestic comparable store sales slipped 14 percent, while Kmart comparable store sales shrank 7.3 percent. Kmart's gross margin rate for the quarter expanded 80 basis points year-over-year, while Sears Domestic's gross margin rate rose 210 basis points. Domestic Adjusted EBITDA came in at $(200) million in the second quarter, versus $(298) million in the year-ago quarter. At August 1, 2015, the company's cash balances were $1.8 billion, versus $250 million at January 31, 2015. At August 1, 2015, domestic merchandise inventories were $5.0 billion, versus $5.8 billion at August 2, 2014. Edward S. Lampert, Holdings' Chairman and Chief Executive Officer, said, "The second quarter marked our fourth consecutive quarter of improved results. During the quarter we completed many of the objectives we laid out to transform Holdings from a traditional, store-network based retail business model to a more asset-light, member-centric integrated retailer leveraging our Shop Your Way platform. The successful completion of these actions has positioned Sears Holdings for long-term success and is consistent with our strategy to focus on our best stores, reward our best members and pursue our best categories as part of our transformation." Sears shares fell 3.07 percent to close at $23.34 yesterday.