Sears Is Becoming Profitable And Things Are Looking Really Good – CWEB.com
Sears Holdings (NASDAQ:SHLD) was +15.7% after-hours and the results include the smallest decline in Sears stores in more than three years.
Sears also provided statement after hours following this spectacular results:
“While we are encouraged by the improved comparable stores sales trend we experienced in the second quarter, and the positive comparable store sales of 3% and 2.5% achieved in the months of July and August, respectively, we have yet to achieve our goal of returning the company to profitability,” SHLD says.
Eddie Lampert was in Chicago this week, which happens basically never. I’m thinking he got the board to sell him Kenmore and they need the day to put finishing touches on it.
Sears will be profitable. Same store sales metric will improve with jettisoned stores. Once the bad stores are gone, it will actually reinforce the remaining stores because many Sears customers will shop at the remaining stores. That will also help the sames stores sales metric. The metric have improved and will get better by next earnings.
“Could SEARS Home Services expand to include special vehicles to install those Amazon tires at your home, thus saving you that noisy trip hanging around the service center. Sure, you’d need some new and larger trucks, but it could save valuable hours of your time. Might the prospect of this exciting new service entice a substantial offer for that part of the company.
A expanded line of home services under the SEARS umbrella.
Sears could close the main stores and still be worth billions to a new buyer including Amazon (NASDAQ:AMZN) in the ever changing retail world of service.”
Comparing to all other retailers in the industry including Kohls, Costco, Nordstrom, Macys, Walmart, Amazon, Sears holding has a potential turnaround of going over $20-$30 within a year by focusing on shop your way and other new ventures including Kenmore purchase.
Sears Holdings Corporation (SHLD) has been named a 2018 ENERGY STAR ®Partner of the Year – Sustained Excellence Award winner for continued leadership in protecting our environment through superior energy efficiency achievements. In addition, the Kenmore brand has been named a 2018 ENERGY STAR ®Partner of the Year – Product Brand Owner. According to the EPA, it marks the first time a company has won all three awards: Retailer, Energy Management and Brand Owner. Sears Holdings’ and Kenmore’s accomplishments will be recognized by the U.S. Environmental Protection Agency and the U.S. Department of Energy at a ceremony in Washington, D.C., on April 20, 2018.
“We truly value Sears Holdings’ partnership with ENERGY STAR and are honored to receive the Partner of the Year Award in Sustained Excellence for the ninth consecutive year in Retail and the seventh consecutive year in Energy Management,” said Edward S. Lampert, chairman and chief executive officer of Sears Holdings. “Being recognized by ENERGY STAR as a retail leader only further increases our members’ trust in us to continuously provide energy-efficient solutions that meet their needs. We remain committed to continuing our work to help increase energy efficiency, to offer savings to our members, and to protect the environment through our dedicated efforts.”
Lastly lets not forget Sears Hometown and Outlet Stores (NASDAQ:SHOS)
Comp for Hometown grew 2.2% and Outlet decreased 2.3%.
Segment sales: Hometown:$303.24M (-12.8%); Outlet sales: $127.8M (-10.2%).
Commercial sales increased 33.1% for the quarter.
SearsHometown.com sales were up 158% Y/Y.
Gross margin rate expanded 250 bps to 21.3%.
SG&A expense rate improved 170 bps to 21.8%.
Merchandise inventories fell 14.1% to $306.7M.
Store count -149 Y/Y to 783.
CWEB Analyst’s have initiated a Buy Rating for Sears (SHLD) and target of $15 – $20 within one year.
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