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Sears Discloses In Q1 Print It May Sell Assets To Improve Liquidity; Stock Jumps +8%

Sears Discloses In Q1 Print It May Sell Assets To Improve Liquidity; Stock Jumps +8%
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Sears Holdings Corp (NASDAQ: SHLD) reported its first-quarter results early Thursday morning and also announced an update to its liquidity situation.

Sears Holdings said it lost $0.186 per share in the first quarter on revenue of $5.39 billion. Wall Street analysts were expecting the company to lose $3.20 per share on revenue of $5.26 billion.

Net loss for the quarter worsened to $471 million from a loss of $303 million a year ago, as Kmart's comparable store sales fell 5.0 percent and Sears' domestic comparable store sales fell 7.1 percent.

Related Link: Retail Earnings Parade Continues: Best Buy, Costco, Sears

However, the company noted that adjusted for significant items, net loss for the quarter would have been $199 million compared to a net loss of $213 million a year ago.

Edward S. Lampert, chairman and CEO, said, "While our operating performance still remains well below our goals, I am pleased to report that our first quarter Adjusted EBITDA, excluding Seritage Growth Properties and joint venture rent, improved by $14 million compared to the first quarter of 2015, largely driven by reductions in overall expenses. Our Sears Domestic and Kmart apparel businesses continue to be negatively impacted by a heavily promotional competitive environment.

"We continue to focus on improving the overall performance of these businesses through changes to our assortment, sourcing, pricing and inventory management practices. We remain focused on restoring Sears Holdings to profitability by concentrating on our best stores, our best members and our best categories through innovative solutions leveraging our Shop Your Way membership program and our Integrated Retail offerings."

Liquidity Update

Sears disclosed in a 10-Q regulatory filing that as management progresses in its transformation, it is focusing on profitability instead of revenues, market share and other metrics which relate to (but do not necessarily drive) profit.

The company added that its approach may negatively impact sales, but is aimed at returning toward profitability.

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"We intend to continue taking actions to alter our capital structure and liquidity position, as circumstances necessitate, to position the Company for success and profitability with the goal of also creating long-term value and funding our transformation," Sears added.

"In addition to the previously described actions taken to date in 2016, we expect to pursue other near-term actions to improve liquidity. These additional actions may include expense reductions as well as asset sales. The specific assets involved, the timing and the overall amount will depend on a variety of factors, including market conditions, interest in specific assets, valuations of those assets and our underlying operating performance."

At Time Of Writing...

Sears Holdings was trading up 8.31 percent at $13.56 within the first 30 minutes of Thursday's regular trading session.

Posted-In: Edward Lampert Kmart sears Sears Asset SalesEarnings News Movers Trading Ideas Best of Benzinga


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