Sears Holdings Corp. Q4 Revenue Plunged 16%; Same-Store Sales Plummeted 10.3%

Written by StockNews.com

Sears Holdings Corp. (Nasdaq:SHLD) early Friday (Feb. 10, 2017 | 7:48am) unexpectedly pre-announced its fourth quarter earnings results, which badly missed expectations, but its plans to restructure and implement massive cost cuts sent its shares soaring in morning trading.

The embattled department store operator said that Q4 revenue plunged 16% to $6.1 billion, while net losses piled up to $635 million. In the year-ago holiday quarter, Sears saw losses of $580 million.

Same-store sales plummeted 10.3% in the period, declining 8% at Kmart locations and 12.3% at Sears stores in the United States. Same-store sales, also known as comparable sales or simply “comps,” are considered a key indicator of a retailer’s health, since they measure only the performance of stores open at least 12 months.

For the full year, Sears expects revenue to fall 12% to $22.1 billion.

On a positive note, the company said it would aggressively slash costs via store closures, layoffs, and other actions. These moves will include the closure of 150 Sears and Kmart stores over the next couple of months. Sears CEO Eddie Lampert commented via press release:

“To build on our positive momentum, today we are initiating a fundamental restructuring of our operations that targets at least $1.0 billion in cost savings on annualized basis, as well as improves our operating performance. To capture these savings, we plan to reduce our corporate overhead, more closely integrate our Sears and Kmart operations and improve our merchandising, supply chain and inventory management.”

...Year-to-date, SHLD had declined -15.93% prior to today’s development, versus a 3.28% rise in the benchmark S&P 500 index during the same period.

SHLD currently has a StockNews.com POWR Rating of F (Strong Sell), and is ranked #27 of 36 stocks in the Specialty Retailers category.