Sears Holdings Corp. on Thursday posted first-quarter earnings at the low end of the retailer's estimates, as the company said results were hurt by declining comps at its Sears and Kmart nameplates.
First-quarter net income for the three months ended May 5 rose 20 percent to $216 million, or $1.40 a diluted share, from $180 million, or $1.14, in the same year-ago quarter. Excluding the impact of certain items, diluted earnings per share were $1.10 versus $1.11 a year ago. During the quarter, the company recognized certain gains, including on a pretax basis: a $30 million gain in connection with the legal settlement of a contractual dispute, a $27 million gain connected with certain amendments made to Sears Canada's postretirement benefit plans and a $15 million benefit in connection with insurance recoveries for properties damaged by hurricanes during 2005. The gains in part were offset by a $21 million loss in connection with the company's return swap investments.
Revenues were down by 2.5 percent to $11.7 billion from $12 billion. The company said domestic same-store sales fell 3.9 percent, with Sears domestic comps shedding 3.4 percent and Kmart comps down by 4.4 percent. Sears domestic stores recorded a comps decline across most merchandise categories and formats, with a notable decrease in home appliance sales, the company said. Kmart also experienced lower transaction volume across most merchandise categories. The one bright spot was Lands' End, which, the company said, posted sales increases.
"In part, our domestic operating results reflect the impact of some of the same challenges being faced by our customers, such as rising energy costs and a slower housing market," said Aylwin Lewis, Sears Holdings' chief executive officer and president. He added that the company needs to overcome "these factors" by better controlling costs and developing innovative solutions that better meet customers' needs.
Richard Hastings, analyst at Bernard Sands, wrote in a research note, "We are cautious in our outlook for operating income in the next three quarters of this year, with a bias to downside risks."
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)
Breaking News: @hedislimane joins @celine as its new artistic, creative and image director. One of fashion’s preeminent image-makers and trendsetters, Slimane is to join the LVMH brand on Feb. 1 and unveil his first fashion proposition for men and women next September during Paris Fashion Week. It marks a major homecoming for Slimane, who cemented his reputation – and influenced men’s tailoring for more than a decade – as the designer of Dior Homme between 2000 and 2007. He went on to reinvent and ignite the house of Yves Saint Laurent, which he rechristened Saint Laurent, between 2012 and 2016 – all the while maintaining a close relationship with the Arnault family, which controls LVMH and Dior. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
“Personally I believe the Eighties have been the richest and more vivacious period for international fashion,” Giorgio Armani said when asked what his favorite decade of fashion is. It was a moment of disruption and experimentation and only thinking back to the first years of that decade is always an emotion for me, for what they have meant to me and my work.” The influence is clear in @giorgioarmani spring 2018 collection, pictured here, which was full of bright colors and unexpected prints. Read more about which decades designers loved most on WWD.com #wwdfashion #wwddecades (📷: @aitorrosasphoto)
For Lady Gaga’s only Italian show on her “Joanne World Tour,” the singer wore a range of @versace_official outfits. The standout piece: this custom-made bodysuit inspired by the brand’s spring 2018 collection. #wwdfashion (RG: @ladygaga)
@_camillaruth_ is expanding on the wellness-craze concept with @westbourne – a new NYC restaurant that’s both a healthy-minded café as well as a business that gives back to the community. Marcus works with the Robin Hood foundation to give back to The Door, a non-profit providing youth development services, and also hires employees through The Door. Read our full interview with Marcus on giving back through food on WWD.com. #wwdeye (📷: @lexieblacklock)