Sears Holdings Announces First Quarter Outlook

In advance of its annual meeting of shareholders to be held on May 4, 2007, Sears Holdings Corporation (the "Company" or "Holdings") (NASDAQ: SHLD) today announced domestic comparable store sales for the first twelve weeks of the thirteen-week fiscal 2007 first quarter which ends May 5, 2007 for its Kmart and Sears stores. Kmart comparable store sales decreased by 4.7%, primarily due to lower transaction volumes across most businesses. Sears domestic comparable store sales declined by 2.4%, primarily reflecting a reduction in home appliances sales, which the Company believes reflects a slower U.S. housing market and increased competition, partially offset by an improvement in children's apparel sales.

The Company currently expects that net income for its first quarter ending May 5, 2007 will be between $200 million and $235 million, or between $1.30 and $1.53 per diluted share. In the first quarter of fiscal 2006, the Company reported net income of $180 million, or $1.14 per diluted share. First quarter forecasted net income for fiscal 2007 includes the favorable net impact of certain significant items which did not impact the prior year period. These significant items, expected to total $69 million on a pre-tax basis or $42 million after-tax ($0.27 per diluted share), include a gain related to a legal settlement, a dividend received by Holdings from its Sears Mexico investment, a curtailment gain related to changes made to Sears Canada benefit plans, a gain from insurance recoveries on stores damaged by hurricanes in 2005, partially offset by losses on total return swap investments. In addition, the Company expects first quarter fiscal 2007 depreciation and amortization expense to be approximately $30 million lower on a pre-tax basis or $18 million after-tax ($0.12 per diluted share) as compared to the first quarter of fiscal 2006. The first quarter of fiscal 2006 included the favorable net impact of items totaling $8 million on a pre-tax basis or $6 million after-tax ($0.03 per diluted share) and included gains recorded on the sale of assets and restructuring charges.

The expected results are preliminary and subject to change based on actual performance through the end of the Company's first quarter on May 5, 2007, as well as due to quarter-end adjustments that may be recorded at that time. The Company currently expects to end the first quarter with approximately $3 billion in cash and cash equivalents, excluding Sears Canada. Holdings expects to release its first quarter results on or about May 31, 2007 and does not intend to update this information prior to that date, including at its annual meeting of shareholders.

During the twelve weeks ended April 28, 2007, Holdings did not repurchase any shares of its common stock through its share repurchase program, although the Company has received approximately 114,000 shares of its common stock in the quarter from bankruptcy-related settlements. The remaining authority under Holdings' existing repurchase program is $604 million.

Forward-Looking Statements

This release contains statements concerning the Company's expected first 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; 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 third 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 Steward 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/