Sears Holdings Corporation (SHLD) reported fourth-quarter fiscal 2013 adjusted loss per share of 96 cents compared with the year-ago quarter adjusted earnings per share of $1.12. However, the company’s loss in the quarter narrowed substantially from the Zacks Consensus Estimate of a loss of $2.50 per share.
Including special items, the company's reported loss reached $3.37 per share compared with a loss per share of $4.61 in the prior-year period.
Quarterly Details
Revenues declined 13.6% to $10,593 million compared with $12,260 million in the year-ago quarter, primarily due to lower domestic comparable store sales, reduction in the number of Kmart and Sears' full-line stores in operation, absence of sales contribution from an additional week as was in fiscal 2012 and decline in Sears Canada comparable store sales. However, revenue for the period surpassed the Zacks Consensus Estimate of $10,028 million.
Segment-wise, sales at Sears Domestic fell 12.2% to $5,489 million, while Kmart sales declined 14.7% to $4,007 million. Moreover, sales at Sears Canada registered a decline of 16.3% to $1,097 million.
The company witnessed a 6.4% decline in domestic comparable store sales, comprising a 5.1% fall at Kmart stores and 7.8% fall at Sears Domestic. Moreover, comps at Sears Canada witnessed a decline of 6.4% during the quarter.
The comparable store sales decline at Kmart stores was due to weak performances in most categories including consumer electronics, grocery & household, toys and drugstore. Comps at Sears Domestic mostly suffered due to weak performance at the consumer electronics, tools and home appliances categories. However, the improvement in the lawn & garden category saved the day for both Sears Domestic and Kmart.
Adjusted gross profit declined 20.7% to $2,511 million compared with $3,166 million reported in the fourth quarter of fiscal 2012. Consequently, gross profit margin contracted 210 basis points to 23.7%. The company's adjusted selling and administrative expenses declined 8.7% to $2,499 million from $2,737 million.
Adjusted earnings before interest, tax and depreciation (EBITDA) in fourth-quarter fiscal 2013 was $12 million, substantially lower than the year-ago comparable quarter figure of $429 million. Adjusted operating loss came in at $133 million, as against an operating profit of $241 million in the year-ago quarter.
Fiscal 2013 Highlights
For fiscal 2013, the company’s adjusted earnings came at $6.60 per share, substantially wider than the year-ago loss per share of $2.51 but significantly narrower compared to the Zacks Consensus Estimate of a loss of $8.13. Revenue for the year declined 9.2% to $36,188 million.
Balance Sheet and Cash Flow
Sears Holdings ended fiscal 2013 with cash and cash equivalents (including restricted cash) of $1,028 million and long-term debt and capitalized lease obligations of $2,834 million, compared with a cash balance of $609 million and long-term debt and capitalized lease obligations of $1,943 million at the end of fiscal 2012. The company's shareholder equity was $2,183 million as of Feb 1, 2014.
Other Stocks to Consider
Sears Holdings currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the retail space include Christopher & Banks Corp. (CBK), Finish Line Inc. (FINL) and Deckers Outdoor Corp. (DECK). Christopher & Banks have a Zacks Rank #1 (Strong Buy), while Finish Line and Deckers carry a Zacks Rank #2 (Buy).
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