CONTACT:
Sears Public Relations And Communications
(847) 286-8371
Sears Holdings Announces December Comparable Store Sales and Fourth Quarter Outlook
HOFFMAN ESTATES, Ill., Jan. 8 /PRNewswire-FirstCall/ -- Sears Holdings
Corporation (the "Company", "we", "us", or "our") (Nasdaq: SHLD) today
announced domestic comparable store sales for the five-week ("December"),
quarter-to-date ("QTD") and year-to-date ("YTD") periods ended January 3,
2009 for its Kmart and Sears stores as follows:
>
December QTD YTD
Kmart -1.1% -4.6% -6.0%
Sears Domestic -12.8% -10.7% -9.4%
Total -7.3% -7.9% -7.9%
Kmart's December comparable store sales benefited from a year over year
increase in sales made through our layaway program. Sears Domestic December
comparable store sales reflect reduced sales across most hardlines and
apparel categories. We believe that comparable store sales were affected by
unfavorable economic conditions, including the weak housing market and
consumer credit issues.
Gross margin rates for the quarter-to-date period improved slightly
from last year as higher margin rates at Kmart were somewhat offset by
lower margin rates at Sears Domestic. We currently expect that net income
for the quarter ending January 31, 2009 will be between $300 million and
$380 million, or between $2.44 and $3.09 per fully diluted share. Our
expectation of fourth quarter net income and earnings per share excludes
the potential impact, if any, related to store closings, restructuring
activities including severance, mark-to-market gains and losses on hedge
transactions executed by Sears Canada and impairment of goodwill and other
intangible assets as prescribed in Statement of Financial Accounting
Standards No. 142. In the fourth quarter of the prior year, the Company
reported net income of $426 million, or $3.17 per fully diluted share.
For the full year ending January 31, 2009, the Company expects net
income to be between $163 million and $243 million, or between $1.27 and
$1.90 per fully diluted share, which also excludes the potential fourth
quarter impact, if any, related to store closings, restructuring activities
including severance, mark-to-market gains and losses on hedge transactions
executed by Sears Canada and impairment of goodwill and other intangible
assets as prescribed in Statement of Financial Accounting Standards No.
142.
During the month of December 2008, we repaid all borrowings under our
revolving credit facility as working capital needs declined as expected
(although we do expect to borrow under the revolver again in January 2009
due to the seasonal increase in working capital). We currently expect to
end the fiscal year with approximately $1.3 billion in cash and cash
equivalents (of which approximately $600 million will be domestic and $740
million will be Sears Canada). The expected cash and cash equivalents
balance indicated does not give effect to any share repurchase activity
after January 7, 2009. In addition, we currently expect to end the fiscal
year with approximately $8.5 billion of domestic inventory, down from $9.1
billion last year, despite the addition of approximately $135 million of
Kmart footwear inventory. Kmart began operating its footwear department on
January 1, 2009. Prior to that time, Kmart's footwear department was
operated as a licensed business by another party.
Also during the fourth quarter, we repurchased 2.9 million common
shares at a total cost of $119 million (or $40.82 per share) under our
share repurchase program. As of January 7, 2009 we had remaining
authorization to repurchase $506 million of common shares under the
previously approved programs.
Forward-Looking Statements
Results are unaudited. This press release contains forward-looking
statements about our expectations regarding our performance, resources and
financial position. Forward-looking statements are subject to risks and
uncertainties that may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by these forward-looking
statements. Such statements are based upon the current beliefs and
expectations of our management and are subject to significant risks and
uncertainties. The following factors, among others, could cause actual
results to differ from those set forth in the forward-looking statements:
our ability to offer merchandise and services that our customers want,
including our proprietary brand products; our ability to successfully
implement initiatives to improve inventory management and other
capabilities; competitive conditions in the retail and related services
industries; the impact of seasonal buying patterns, including seasonal
fluctuations due to weather conditions, which are difficult to forecast
with certainty; general economic conditions and normal business
uncertainty, changes in consumer confidence, tastes, preferences and
spending, including the impact of fuel costs and spending patterns, the
availability and level of consumer debt, and unanticipated increases in our
costs; our dependence on sources outside the United States for significant
amounts of our merchandise; our extensive reliance on computer systems to
process transactions, summarize results and manage our business; our
reliance on third parties to provide us with services in connection with
the administration of certain aspects of our business; our ability to
properly implement and realize the expected benefits from our new
organizational structure and operating model; our ability to attract,
motivate and retain key executives and other associates; the outcome of
pending and/or future legal proceedings, including product liability claims
and bankruptcy claims, including proceedings with respect to which the
parties have reached a preliminary settlement; and our ability to
successfully invest available capital. We intend the forward-looking
statements to speak only as of the time made and do not undertake to update
or revise them as more information becomes available.
About Sears Holdings Corporation
Sears Holdings Corporation is the nation's fourth largest broadline
retailer, with over $50 billion in annual revenues, and approximately 3,900
full-line and specialty retail stores in the United States and Canada.
Sears Holdings is the leading home appliance retailer as well as a leader
in tools, lawn and garden, home electronics and automotive repair and
maintenance. Key proprietary brands include Kenmore, Craftsman and DieHard,
and a broad apparel offering, including such well-known labels as Lands'
End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington
brands. We also have Martha Stewart Everyday products, which are offered
exclusively in the U.S. by Kmart and in Canada by Sears Canada. We are the
nation's largest provider of home services, with more than 13 million
service calls made annually. For more information, visit Sears Holdings'
website at http://www.searsholdings.com.
During the fourth quarter of fiscal 2007, Sears Canada changed its
fiscal year end from the Saturday nearest December 31st to the Saturday
nearest January 31st. Prior to this change, Sears Canada's results were
consolidated into Holdings' results on a one-month lag. With the change,
Sears Canada's fiscal year end is now aligned with the fiscal year end of
Holdings.
SOURCE Sears Holdings Corporation
Web site: http://www.searsholdings.com
CONTACT: Sears Holdings Public Relations, +1-847-286-8371
