CONTACT:
Sears Public Relations And Communications
(847) 286-8371
Sears Holdings Announces Second Quarter Outlook and Increased Share Repurchase Authorization
HOFFMAN ESTATES, Ill., July 10 /PRNewswire-FirstCall/ -- 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.
Forward-Looking Statements
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
SOURCE Sears Holdings Corporation
Web site: http://www.searsholdings.com
CONTACT: Sears Holdings Public Relations, +1-847-286-8371
