Sears Holdings Corporation announced domestic comparable store sales for its second quarter, the thirteen-week period ended August 4, 2007, for its Kmart and Sears stores. For the second quarter, Kmart comparable store sales decreased by 3.8 percent, with declines across most categories.
Sears domestic comparable store sales decreased by 4.3 percent, with declines across most categories partially offset by increases in consumer electronics, women's apparel and footwear.
The Company currently expects second quarter net income to be between $170 million and $185 million, or between $1.13 and $1.23 per fully diluted share. Since providing an estimated range of $160 million to $200 million on July 10, 2007, the Company has experienced higher markdowns, most notably within seasonal apparel categories that were largely offset by lower payroll expense, including performance-based compensation, and favorable inventory shrink experience.
For the second quarter last year, the Company reported net income of $294 million, or $1.88 per fully diluted share. The current year second quarter estimate includes a combined pre-tax gain of $15 million ($9 million after-tax or $0.06 per diluted share) resulting from gains from bankruptcy- related settlements, insurance recoveries on claims filed for certain Holdings' property damaged by hurricanes during fiscal 2005 and total return swap investing activities.
The second quarter 2006 results included a $36 million pre-tax gain ($22 million after-tax or $0.14 per diluted share) representing the Company's portion of proceeds received during the second quarter of 2006 related to the settlement of Visa/MasterCard antitrust litigation. Excluding the impact of this gain, second quarter 2006 net income was $272 million, or $1.74 per diluted share.
Sears Holdings' Chief Executive Officer Aylwin Lewis stated, "While we recognize the housing market slowdown and other economic pressures have presented a noticeable headwind to the business, we are disappointed with our second quarter results. We will work hard to improve our financial performance going forward."
The Company expects to report approximately $2.0 billion in cash and cash equivalents at the end of the second quarter, excluding Sears Canada. The Company had announced on July 10, 2007, that it expected to end the second quarter with approximately $2.8 billion in cash and cash equivalents, excluding Sears Canada, not including any share repurchasesafter July 7, 2007. The difference resulted primarily from share repurchases subsequent to July 7, 2007 through the end of the second quarter.
marketing@alchempro.com
