Sears Holdings Earnings: Beats Expectations with Narrowing Loss

S&P 500 (NYSE:SPY) component Sears Holdings Corporation’s (NASDAQ:SHLD) second quarter loss narrowed, beating estimates. Sears Holdings is a retail conglomerate with full-line and specialty retail stores in the United States and Canada. It is the holding company of Kmart Holding Corporation and Sears, Roebuck and Co. Its three reportable segments are Kmart, Sears Domestic and Sears Canada.

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Sears Holdings Corporation Earnings Cheat Sheet

Results: Loss narrowed to $132 million (loss of $1.25 per diluted share) from $146 million (loss of $1.37 per share) in the same quarter a year earlier.

Revenue: Fell 6.6% to $9.47 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Sears Holdings Corporation reported adjusted net income of 86 cents per share. By that measure, the company beat the mean analyst estimate of a loss of 59 cents per share. It beat the average revenue estimate of $9.15 billion.

Quoting Management: Lou D’Ambrosio, Sears Holdings’ Chief Executive Officer and President, said, “We continue to make progress against the priorities we outlined in our fourth quarter earnings release and call. In particular, we have improved our profit position, as we reduced expenses and expanded margin rate through more effective promotional design. We have also successfully lowered inventory, reduced debt from year end, and enhanced our liquidity. In addition, the Sears Hometown transaction remains on track to close in the third quarter. While we drive operational discipline, we are also investing in our customer experience, particularly through our ShopYourWay membership program and Integrated Retail. Our focus is on providing clear benefits to our members and customers, and delivering an excellent and seamless experience across the store, online, mobile and in the home.”

Key Stats:

After two quarters of falling short, the company beat estimates last quarter. In the first quarter, it missed the mark by 14 cents, and in the fourth quarter of the last fiscal year, it came in under estimates by 57 cents.

The company reported a net loss last quarter after booking a profit the quarter before that. In the fourth quarter of the last fiscal year, the company booked a profit of $2.4 billion, or $22.51 per share.

Looking Forward: Expectations for the company’s next-quarter performance are higher than they were ninety days ago. The average estimate for the third quarter is now at a loss of $1.29 per share, up from a loss of $2.32. Over the past ninety days, the average estimates for the fiscal year has risen from a loss of $6.82 per share to a loss of $2.32.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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