Sears Holding Corp. posted a 40 percent year-over-year drop in second-quarter income Thursday due to lower operating results in its Sears Domestic and Kmart units just two weeks after the retailer reduced its guidance range for the period on economic...
Sears Holding Corp. posted a 40 percent year-over-year drop in second-quarter income Thursday due to lower operating results in its Sears Domestic and Kmart units just two weeks after the retailer reduced its guidance range for the period on economic pressures.
"We are disappointed with our second-quarter results," said Aylwin Lewis, Sears' chief executive officer in a statement. "Our gross margins came under pressure from sales declines and increased promotional activity, and, as a result, our net income was significantly below last year and our expectations."
Shares of Sears fell 2.6 percent to $141.83 in Nasdaq trading.
For its second quarter ended Aug. 4, Sears reported net income of $176 million, or $1.17 a diluted share, down 40.1 percent from $294 million, or $1.88 a diluted share, in the year-earlier period. The 2006 second-quarter earnings results included a 14-cent-a-share gain related to antitrust litigation.
Sears posted second-quarter revenue of $12.24 billion, down 4.7 percent from $12.79 billion in the year-ago period.
Analysts expected the Hoffman Estates, Ill.-based company to post earnings of $1.13 a share on revenue of $12.32 billion.
On Aug. 13, Sears lowered its second-quarter forecast to an income range of $170 million to $185 million, or $1.13 to $1.23 a diluted share, from July 10 guidance of earnings between $160 million and $200 million, or between $1.06 and $1.32 a diluted share. At the time, the company reported a second-quarter comparable-store sales decrease of 4.3 percent in its Sears domestic stores and a 3.8 percent decline in its Kmart stores, partially offset by strength of women's apparel at Kmart's and Sears' U.S. stores. Footwear and electronics also did better than average at Sears.
Sears also announced an additional $1.5 billion for its share repurchase program earlier this month.
The retailer ended the quarter with $2 billion in cash and cash equivalents, excluding Sears Canada.
Bear Stearns analyst Christine Augustine, who rates Sears shares at "market weight," noted earlier this week that Sears continues to have one of the highest free cash flow yields in the broadlines sector at 8 percent of sales compared with its peer average of 4 percent."While we believe that [Sears Holding] continues to evaluate various investment options for its significant cash balance, we believe that the probability of [Sears Holding] announcing an acquisition over the near term is slim, given the focus on share repurchases," Augustine said.
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews