Sears Holdings Corporation (the "Company" or "Holdings") (NASDAQ: SHLD) today announced domestic comparable store sales for the nine-week period ended December 30, 2006 for its Kmart and Sears stores. Kmart comparable store sales decreased by 1.2% due to lower transaction volumes. Apparel sales at Kmart, while negatively impacted by unseasonably warm weather, increased over the prior year. Sears domestic comparable store sales declined by 5.6% reflecting lower lawn and garden and appliance sales partially offset by an improvement in Sears women's apparel.
The Company currently expects that net income for its fourth quarter ending February 3, 2007 will be between $750 million and $830 million, or between $4.87 and $5.39 per fully diluted share. In the fourth quarter of the prior year, the Company reported net income of $648 million, or $4.03 per fully diluted share. The current year fourth quarter estimate includes a combined gain of approximately $20 million pretax ($12 million after-tax) resulting from gains from property sales and losses related to total return swap investing activities (reflecting actual results only through December 30, 2006 and no estimate for January activity.) The 2006 fiscal year ending February 3, 2007 is a 53-week year for the Company. As such, the current year fourth quarter is 14 weeks versus 13 weeks last year.
For the full year ending February 3, 2007, the Company expects net income to be between $1.42 billion and $1.50 billion, or between $9.12 and $9.63 per fully diluted share.
The expected results are preliminary and subject to change based on actual performance in January, as well as year-end adjustments. The Company currently expects to end the fiscal year with approximately $3.5 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, total return swap investing or property sale activities after December 30, 2006. Holdings expects to release its fourth quarter and full-year financial results on or about March 1, 2007 and does not intend to update this information prior to that date.
During the nine weeks ended December 30, 2006, Holdings did not repurchase any shares of its common stock through its share repurchase program. The remaining authority under Holdings' existing repurchase program is $618 million.
This release contains statements concerning the Company's expected fourth quarter 2006 net income, earnings per share and cash position. These statements are forward-looking statements based on assumptions about the future that are subject to risks and uncertainties, and actual results may differ materially from the results projected in the forward-looking statements. Risks and uncertainties that may cause actual results to differ materially include: the risk that the businesses of Sears and Kmart will not be integrated successfully; the ability to attract, motivate and retain key executives and other associates; the ability to maintain relationships with customers, employees and suppliers; competitive conditions in the retail and related services industries; changes in consumer confidence, tastes, preferences and spending, including the impact of fuel costs on spending patterns; marketplace demand for the products of Holdings and Holdings' key brand partners, as well as the engagement of appropriate new brand partners; operational or financial difficulties at any of Holdings' business partners; the availability and level of consumer debt; the successful execution of, and customer response to, strategic initiatives, including the full-line store strategy and the integration of other store locations and formats; the ability to successfully implement initiatives to improve inventory management capabilities; anticipated cash flow and the ability of Holdings to maintain sufficient operating cash flow and liquidity; changes in interest rates; 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; the possibility of negative investment returns in pension plans or in investments of surplus capital; volatility in financial markets; changes in debt ratings, credit spreads and cost of funds; the impact of seasonal buying patterns, which are difficult to forecast with certainty; and general economic conditions and normal business uncertainty.
Certain of these and other factors are discussed in more detail in the Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended January 28, 2006 and its Quarterly Report on Form 10-Q for the fiscal quarter ended October 28, 2006, all of which may be accessed through the Commission's website at http://www.sec.gov/.
While Holdings believes that its forecasts and assumptions are reasonable, it cautions that actual results may differ materially. Holdings 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.
About Sears Holdings Corporation
Sears Holdings Corporation is the nation's third largest broadline retailer, with approximately $55 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 one of the leading retailers of 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. Holdings is the nation's largest provider of home services, with more than 14 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/