Sears Holdings Corporation (NASDAQ: SHLD) (the "Company" or "Holdings") today announced domestic comparable store sales for the nine-week period ended July 7, 2007 for its Kmart and Sears stores. This period represents the first nine weeks of the Company's thirteen-week fiscal 2007 second quarter which ends August 4, 2007. For the nine-week period, Kmart comparable store sales decreased by 3.9 percent, with declines across most categories. Sears domestic comparable store sales decreased by 4.0 percent, with declines across most categories partially offset by increases in women's apparel and footwear. While comparable store sales within home appliances declined to a higher degree than declines recorded across most other categories for this period, the decline in home appliances was less than the decline experienced in this category during the first quarter of this fiscal year.
The Company anticipates that, if the sales trends experienced during the first nine weeks of the second quarter continue through the rest of the second quarter ending August 4, 2007, net income will be between $160 million and $200 million, or between $1.06 and $1.32 per fully diluted share. The current year second quarter estimate includes a combined gain of approximately $20 million pre-tax ($12 million after-tax or $0.08 per diluted share) resulting from gains from bankruptcy-related settlements and total return swap investing activities (reflecting actual results only through July 7, 2007 and no estimate for activity occurring after July 7, 2007). For the second quarter last year, the Company reported net income of $294 million, or $1.88 per fully diluted share. 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.
During the nine-week period ended July 7, 2007, the Company repurchased 2.8 million common shares at a total cost of $484 million, or an average price of $174.67 per share. As of July 7, 2007, Holdings had approximately 150.9 million common shares outstanding. In addition, the Company repaid approximately $200 million of domestic debt.
Sears Holdings Chief Executive Officer Aylwin Lewis said, "We are disappointed with our recent performance. Although we believe our business has suffered from many of the same factors that have led other retailers to announce disappointing results and lowered expectations, our recent performance underscores our ongoing need to become more relevant to consumers while improving our discipline around expense management."
The Company currently expects to end the second quarter with approximately $2.8 billion in cash and cash equivalents, excluding Sears Canada. The expected cash and cash equivalents balance indicated does not give effect to any share repurchase or property sale activities after July 7, 2007.
The expected results are forward-looking projections and subject to change based on actual performance in fiscal July 2007, as well as quarter-end adjustments. Holdings expects to release its second quarter financial results on or about August 30, 2007 and does not intend to update this information prior to that date.
The Company also announced today that its Board of Directors has approved the repurchase of up to an additional $1.0 billion of the Company's common shares. This authorization is in addition to the $121 million worth of shares that remain available for repurchase under the Company's existing repurchase program. The shares are expected to be purchased in the open market or in privately negotiated transactions. Timing will be dependent on prevailing market conditions, alternative uses of capital and other factors. The Company has repurchased approximately 13.8 million of the Company's common shares at a total cost of $1.9 billion since the third quarter of fiscal 2005, when Holdings' repurchase plan was first approved.
This release contains statements concerning the Company's expected second quarter 2007 net income, earnings per share and cash position. These forward-looking statements are subject to risks and uncertainties that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Such statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties. Risks and uncertainties include competitive conditions in the retail and related services industries; changes in consumer confidence, tastes, preferences and spending; the Company's ability to successfully implement initiatives to improve sales and profitability; marketplace demand for the Company's proprietary brand products and the products of the Company's key brand licensors; the impact of seasonal fluctuations due to weather conditions; the Company's ability to successfully invest available capital; the outcome of pending and/or future legal proceedings and bankruptcy claims; social and political conditions such as war, political unrest and terrorism or natural disasters; volatility in financial markets; general economic conditions and normal business uncertainty; and other factors outside the control of Holdings. Actual results may differ materially from those set forth in the forward-looking statements. The Company intends the forward-looking statements to speak only as of the time made and does not undertake to update or revise them as more information becomes available.
Certain of these and other factors are discussed in more detail in Holdings' filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K of Holdings for the fiscal year ended February 3, 2007, which may be accessed through the Commission's website at http://www.sec.gov/
About Sears Holdings Corporation
Sears Holdings Corporation is the nation's fourth largest broadline retailer, with approximately $50 billion in annual revenues, and with approximately 3,800 full-line and specialty retail stores in the United States and Canada. Sears Holdings is the leading home appliance retailer as well as a leader in tools, lawn and garden, home electronics and automotive repair and maintenance. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has Martha Stewart Everyday products, which are offered exclusively in the U.S. by Kmart and in Canada by Sears Canada. The Company is the nation's largest provider of home services, with more than 13 million service calls made annually. For more information, visit Sears Holdings' website at http://www.searsholdings.com/
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SOURCE: Sears Holdings Corporation
CONTACT: Sears Holdings Public Relations, +1-847-286-8371
Web site: http://www.searsholdings.com/