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Sears Holdings Announces First Quarter Outlook

    HOFFMAN ESTATES, Ill., May 3 /PRNewswire-FirstCall/ -- 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

SOURCE Sears Holdings Corporation





 

 
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