US: Sears same-store sales slip, but sees Q4 profit boost
Sears Holdings Corp saw comparable-store sales declines at both Sears and Kmart during the November-December period, with apparel a bright spot at both.
Still, the company projected that its net income would increase more than 15% during the fourth quarter, which ends 3 February.
During the nine weeks ended 30 December, comps were down 1.2% at Kmart and off 5.6% at Sears. Apparel sales were up at Kmart, Sears Holdings said, despite the negative effect of unseasonably warm weather, and women's apparel improved at Sears, which was hurt by lower sales of lawn and garden merchandise.
Despite holiday period softness, the company projected that its fourth-quarter net income would land between US$750m, or $4.87 a diluted share, and $830m, or $5.39. The lower figure would represent a 15.7% improvement over its 2006 counterpart, while the higher one would mark a 28.1% pickup.
The forecast figures include a pretax gain of about $20m resulting from property sale and losses related to total return swap investments.
The fourth quarter of the current fiscal year is a 14-week period, versus 13 weeks in fiscal 2006.
Guidance for the full year was set at net income of $1.42bn to $1.5bn, or $9.12 to $9.63 a diluted share.
Sears expects to end the year with $3.5m in cash and cash equivalents, excluding figures for its holdings in Sears Canada.
Based in Hoffman Estates, Illinois, Sears Holdings operates about 3,800 stores under the Sears and Kmart names in the US and Canada. The company expects to release fourth-quarter and full-year results on or about 1 March. No updates are expected prior to that.
By Arnold J Karr.
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