Sears Saw Worst Holiday Sales Decline Yet
Sears Holdings Corp's domestic Sears stores saw an 18.1% drop in same-store sales in its important holiday fourth quarter 2017. According to MSN, the decline is the worst in history for Sears' namesake stores.
Overall, comparable store sales declined 15.6%, comprised of a decrease of 12.2% at Kmart and Sears drop, the retailer said in a regulatory filing. The company said it expects total revenues of $4.4 billion for the fourth quarter of 2017, compared to $6.1 billion in the prior quarter.
Yet, despite its anticipated $1.7 billion loss in revenue and suffering holiday showing, Sears said it expects to turn a profit of $140 million to $240 million for the quarter, which sent shares surging 14%. The profit is "inclusive of a non-cash tax benefit of approximately $445 million to $495 million related to tax reform."
"Holdings is working to transform to a less asset-intensive business model, with a store footprint and digital capabilities meeting consumer needs and preferences," the company said in the filing.
In January, the company announced it raised $100 million in new financing and is pursuing an additional $200 million from other counterparties.
"As previously announced, we are actively pursuing transactions to adjust our capital structure in order to generate liquidity and increase our financial flexibility," said Rob Riecker, Sears Holdings' CFO. "The new capital we have secured represents meaningful progress towards those objectives and demonstrates that we continue to have options to finance our business."
The retailer also laid off about 220 corporate employees that month, most of which worked at the company’s Hoffman Estates, IL headquarters. The cuts affected various business units and roles across the organization.
In 2017, the Kmart and Sears' parent company said in a filing, "our historical operating results indicate substantial doubt exists related to the company's ability to continue as a going concern."