HOFFMAN ESTATES, Ill.,
Dec. 8. 2016 /PRNewswire/
-- Sears Holdings Corporation ("Holdings," "we," "us," "our,"
or the "Company")(NASDAQ: SHLD) today announced financial results
for its third quarter ended October 29, 2016. As a supplement
to this announcement, a presentation, pre-recorded conference and
audio webcast are available at our
website http://searsholdings.com/invest.
In summary, we reported a net loss attributable to Holdings'
shareholders of $748 million
($6.99 loss per diluted share) for
the third quarter of 2016 compared to a net loss attributable to
Holdings' shareholders of $454
million ($4.26 loss per
diluted share) for the prior year third quarter. Adjusted for
significant items noted in our Adjusted Earnings Per Share tables,
we would have reported a net loss attributable to Holdings'
shareholders of $333 million
($3.11 loss per diluted share) for
the third quarter of 2016 compared to a net loss attributable to
Holdings' shareholders of $305
million ($2.86 loss per
diluted share) in the prior year third quarter. Adjusted EBITDA was
$(375) million in the third quarter
of 2016, as compared to $(332)
million in the prior year third quarter.
Edward S. Lampert, Holdings'
Chairman and Chief Executive Officer, said, "We remain fully
committed to restoring profitability to our Company and are taking
actions such as reducing unprofitable stores, reducing space in
stores we continue to operate (including through the Seritage lease
arrangement), reducing investments in underperforming categories
and improving gross margin performance and managing expenses
relative to sales in key categories. While many observers
have acknowledged the significant asset base of our Company,
we understand the concerns related to our operating performance and
are committed to transforming our Company through our Shop Your Way
membership program and our Integrated Retail investments. At the
same time, we will continue to explore options to recognize the
inherent asset value in a manner that complements our
transformation."
Highlights include:
- A partnership with Citi Retail Services, Inc. to bring together
the Sears MasterCard and Shop Your Way® offer.
Starting November 1st, more than five million current Sears
MasterCard holders whose cards are linked to the Shop Your
Way® program earn more Shop Your Way® points
at many of their favorite places and, in early 2017, the Sears
MasterCard will evolve into a newly branded Shop Your
Way® card;
- A strategic relationship with Uber Technologies, Inc. that
allows its drivers and riders to earn Shop Your Way®
points on trips made with Uber, leveraging the scale of Shop Your
Way®, its tens of millions of members, and the footprint
of Sears Auto Centers to provide unique benefits for drivers and
riders; and
- Improvements in our Home Services business and expansion of its
capabilities including our home warranty offerings.
Jason M. Hollar, Holdings' Chief
Financial Officer, said, "We will continue to take actions to
generate liquidity, adjust our overall capital structure, and
manage our business while meeting all of our financial obligations.
Actions may include additional expense reductions, financing
transactions and asset monetization including exploring
alternatives for our Kenmore®, Craftsman® and
DieHard® brands, our Sears Home Services business and
our real estate portfolio."
Financial Results
Revenues decreased approximately $721
million to $5.0 billion for the quarter ended
October 29, 2016, compared to revenues of $5.8 billion for the quarter ended
October 31, 2015. The year-over-year decline in revenues was
primarily driven by having fewer Kmart and Sears Full-line stores
in operation, which accounted for $323
million of the decline, as well as a 7.4% decline in
comparable store sales during the quarter, which accounted for
$304 million of the revenue
decline.
At Kmart, comparable store sales decreased 4.4%. While we
experienced an overall comparable store sales decline in our Kmart
segment driven by declines in the grocery & household, consumer
electronics and pharmacy categories, we are encouraged by the
comparable store sales increases experienced in several categories
this quarter, including apparel, jewelry and outdoor living. Sears
Domestic comparable store sales decreased 10.0% during the third
quarter of 2016, primarily driven by decreases in the home
appliances, apparel and consumer electronics categories.
During the third quarter, gross margin decreased $300 million compared to the prior year third
quarter due to the above noted decline in sales, as well as a
decline in our gross margin rate in both the Kmart and Sears
Domestic segments. The decline in margin rate in both segments was
primarily driven by a decline in gross margin performance in the
apparel business, as well as an overall increase in markdowns.
Selling and administrative expenses decreased $87 million in the third quarter of 2016 compared
to the prior year quarter. Excluding significant items noted in our
Adjusted Earnings Per Share tables, selling and administrative
expenses declined $224 million,
primarily due to a decrease in payroll expense. In addition,
advertising expense declined as we shifted away from traditional
advertising to the use of Shop Your Way® points awarded
to members, the expense for which is included in gross margin.
Financial Position
The Company's cash balances were $258
million at October 29, 2016 compared with $238 million at January 30, 2016. Short-term
borrowings totaled $618 million at
the end of the third quarter of 2016 compared to $797 million at January 30, 2016.
Merchandise inventories were $5.0
billion at October 29, 2016, compared to $6.2 billion at October 31, 2015, while
merchandise payables were $1.6
billion and $2.3 billion at
October 29, 2016 and October 31, 2015, respectively.
At October 29, 2016, we had utilized approximately
$1.0 billion of our $1.971 billion revolving credit facility due in
2020 (consisting of $370 million of
borrowings and $660 million of
letters of credit outstanding). The amount available to borrow
under our credit facility was approximately $174 million, which reflects the effect of our
springing fixed charge coverage ratio covenant and the borrowing
base limitation in our revolving credit facility, which varies
primarily based on our overall inventory and receivables
balances.
Total long-term debt (including current portion of long-term
debt and capital lease obligations) was $3.7
billion and $2.2 billion at
October 29, 2016 and January 30, 2016, respectively.
Update on Strategic Initiatives
On May 26, 2016, we announced our
intention to explore alternatives for our Kenmore®,
Craftsman® and DieHard® brands and our Sears
Home Services business by evaluating potential partnerships or
other transactions that could expand distribution of our brands and
service offerings to realize significant growth. We continue to
evaluate opportunities for these businesses. There can be no
assurance that we will complete one or more transactions, and we
also intend to take actions on our own that present the opportunity
to improve the economics of these brands and business, including
potential externalization through non-Sears Holdings channels.
Adjusted EBITDA
In addition to our net loss attributable to Sears Holdings'
shareholders determined in accordance with Generally Accepted
Accounting Principles ("GAAP"), for purposes of evaluating
operating performance, we use Adjusted Earnings Before Interest,
Taxes, Depreciation and Amortization ("Adjusted EBITDA") and
Adjusted Loss Per Share ("Adjusted EPS"), which are non-GAAP
measures. The tables attached to this press release provide a
reconciliation of GAAP to as adjusted amounts. We believe that our
use of Adjusted EBITDA and Adjusted EPS provides an appropriate
measure for investors to use in assessing our performance across
periods, given that these measures provide adjustments for certain
significant items which may vary significantly from period to
period, improving the comparability of year-to-year results and is
therefore representative of our ongoing performance. Therefore, we
have adjusted our results for them to make our statements more
useful and comparable. However, we do not, and do not recommend
that you, solely use Adjusted EBITDA or Adjusted EPS to assess our
financial and earnings performance. We also use, and recommend that
you use, diluted loss per share in addition to Adjusted EPS in
assessing our earnings performance.
As a result of the Seritage and JV transactions, Adjusted EBITDA
for the third quarter of 2016 and 2015 included additional rent
expense of approximately $48 million
and $52 million, respectively, while
the first nine months of 2016 and 2015 included additional rent
expense of approximately $150 million
and $78 million, respectively. Due to
the structure of the leases, we expect that our cash rent
obligations to Seritage and the joint venture partners will
decline, over time, as space in these stores is recaptured. From
the inception of the Seritage transaction to date, we have received
recapture notices on 17 properties, which is estimated to reduce
the rent expense by approximately $10
million on an annual basis. We have also exercised our right
to terminate the lease on 17 properties, which is estimated to
reduce rent expense by approximately $6
million on an annual basis.
Forward-Looking Statements
Results are unaudited. This press release contains
forward-looking statements intended to qualify for the safe harbor
from liability established by the Private Securities Litigation
Reform Act of 1995, including, but not limited to, statements about
our transformation through our integrated retail strategy, our
plans to redeploy and reconfigure our assets, our liquidity, our
ability to successfully achieve our plans to generate liquidity
through potential transactions or otherwise, our intention to
explore potential partnerships or other transactions involving our
Kenmore®, Craftsman® and DieHard®
brands and our Sears Home Services business, and other statements
that describe the Company's plans. Whenever used, words such as
"will," "expect," and other terms of similar meaning are intended
to identify such forward-looking statements. Forward-looking
statements, including these, are based on the current beliefs and
expectations of our management and are subject to significant
risks, assumptions and uncertainties, many of which are beyond the
Company's control, that may cause our actual results, performance
or achievements to be materially different from any future results,
performance or achievements expressed or implied by these
forward-looking statements. Detailed descriptions of risks,
uncertainties and factors relating to Sears Holdings are discussed
in our most recent Annual Report on Form 10-K and other filings
with the Securities and Exchange Commission. While we believe that
our forecasts and assumptions are reasonable, we caution that
actual results may differ materially. We intend the forward-looking
statements to speak only as of the time made and do not undertake
to update or revise them as more information becomes available,
except as required by law.
About Sears Holdings Corporation
Sears Holdings Corporation (NASDAQ: SHLD) is a leading
integrated retailer focused on seamlessly connecting the digital
and physical shopping experiences to serve our members - wherever,
whenever and however they want to shop. Sears Holdings is home
to Shop Your Way®, a social shopping platform offering
members rewards for shopping at Sears and Kmart, as well as with
other retail partners across categories important to them. The
Company operates through its subsidiaries, including Sears, Roebuck
and Co. and Kmart Corporation, with full-line and specialty retail
stores across the United States.
For more information, visit www.searsholdings.com.
NEWS MEDIA CONTACT:
Sears Holdings Public
Relations
(847) 286-8371
Sears Holdings
Corporation
|
Condensed
Consolidated Statements of Operations
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
|
|
13 Weeks
Ended
|
|
39 Weeks
Ended
|
millions, except
per share data
|
October
29,
2016
|
|
October
31,
2015
|
|
October
29,
2016
|
|
October
31,
2015
|
REVENUES
|
|
|
|
|
|
|
|
Merchandise sales and
services
|
$
|
5,029
|
|
|
$
|
5,750
|
|
|
$
|
16,086
|
|
|
$
|
17,843
|
|
COSTS AND
EXPENSES
|
|
|
|
|
|
|
|
Cost of sales, buying
and occupancy
|
4,067
|
|
|
4,488
|
|
|
12,687
|
|
|
13,628
|
|
Gross margin
dollars
|
962
|
|
|
1,262
|
|
|
3,399
|
|
|
4,215
|
|
Gross margin
rate
|
19.1
|
%
|
|
21.9
|
%
|
|
21.1
|
%
|
|
23.6
|
%
|
Selling and
administrative
|
1,543
|
|
|
1,630
|
|
|
4,530
|
|
|
5,005
|
|
Selling and
administrative expense as a percentage of total
revenues
|
30.7
|
%
|
|
28.3
|
%
|
|
28.2
|
%
|
|
28.1
|
%
|
Depreciation and
amortization
|
91
|
|
|
94
|
|
|
278
|
|
|
330
|
|
Impairment
charges
|
3
|
|
|
17
|
|
|
18
|
|
|
71
|
|
Gain on sales of
assets
|
(51)
|
|
|
(97)
|
|
|
(166)
|
|
|
(730)
|
|
Total costs and
expenses
|
5,653
|
|
|
6,132
|
|
|
17,347
|
|
|
18,304
|
|
Operating
loss
|
(624)
|
|
|
(382)
|
|
|
(1,261)
|
|
|
(461)
|
|
Interest
expense
|
(105)
|
|
|
(74)
|
|
|
(289)
|
|
|
(249)
|
|
Interest and
investment income (loss)
|
(8)
|
|
|
17
|
|
|
(25)
|
|
|
(27)
|
|
Loss before income
taxes
|
(737)
|
|
|
(439)
|
|
|
(1,575)
|
|
|
(737)
|
|
Income tax (expense)
benefit
|
(11)
|
|
|
(14)
|
|
|
(39)
|
|
|
189
|
|
Net loss
|
(748)
|
|
|
(453)
|
|
|
(1,614)
|
|
|
(548)
|
|
Income attributable
to noncontrolling interests
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
NET LOSS
ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS
|
$
|
(748)
|
|
|
$
|
(454)
|
|
|
$
|
(1,614)
|
|
|
$
|
(549)
|
|
NET LOSS PER
COMMON SHARE ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS
|
|
|
|
|
|
|
|
Diluted loss per
share
|
$
|
(6.99)
|
|
|
$
|
(4.26)
|
|
|
$
|
(15.10)
|
|
|
$
|
(5.15)
|
|
Diluted weighted
average common shares outstanding
|
107.0
|
|
|
106.6
|
|
|
106.9
|
|
|
106.5
|
|
Sears Holdings
Corporation
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions
|
|
October
29,
2016
|
|
October
31,
2015
|
|
January
30,
2016
|
ASSETS
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
258
|
|
|
$
|
294
|
|
|
$
|
238
|
|
Accounts
receivable
|
|
372
|
|
|
475
|
|
|
419
|
|
Merchandise
inventories
|
|
5,032
|
|
|
6,208
|
|
|
5,172
|
|
Prepaid expenses and
other current assets
|
|
304
|
|
|
242
|
|
|
216
|
|
Total current
assets
|
|
5,966
|
|
|
7,219
|
|
|
6,045
|
|
Property and
equipment (net of accumulated depreciation and amortization of
$2,886, $2,925 and $2,960)
|
|
2,392
|
|
|
2,668
|
|
|
2,631
|
|
Goodwill
|
|
269
|
|
|
269
|
|
|
269
|
|
Trade names and other
intangible assets
|
|
1,904
|
|
|
2,090
|
|
|
1,909
|
|
Other
assets
|
|
334
|
|
|
510
|
|
|
483
|
|
TOTAL
ASSETS
|
|
$
|
10,865
|
|
|
$
|
12,756
|
|
|
$
|
11,337
|
|
LIABILITIES
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
618
|
|
|
$
|
686
|
|
|
$
|
797
|
|
Current portion of
long-term debt and capitalized lease obligations
|
|
594
|
|
|
71
|
|
|
71
|
|
Merchandise
payables
|
|
1,556
|
|
|
2,295
|
|
|
1,574
|
|
Other current
liabilities
|
|
1,848
|
|
|
1,927
|
|
|
1,925
|
|
Unearned
revenues
|
|
759
|
|
|
793
|
|
|
787
|
|
Other
taxes
|
|
355
|
|
|
324
|
|
|
284
|
|
Total current
liabilities
|
|
5,730
|
|
|
6,096
|
|
|
5,438
|
|
Long-term debt and
capitalized lease obligations
|
|
3,087
|
|
|
2,111
|
|
|
2,108
|
|
Pension and
postretirement benefits
|
|
1,997
|
|
|
2,133
|
|
|
2,206
|
|
Deferred gain on
sale-leaseback
|
|
656
|
|
|
775
|
|
|
753
|
|
Sale-leaseback
financing obligation
|
|
164
|
|
|
164
|
|
|
164
|
|
Other long-term
liabilities
|
|
1,716
|
|
|
1,811
|
|
|
1,731
|
|
Long-term deferred
tax liabilities
|
|
890
|
|
|
959
|
|
|
893
|
|
Total
Liabilities
|
|
14,240
|
|
|
14,049
|
|
|
13,293
|
|
DEFICIT
|
|
|
|
|
|
|
Total
Deficit
|
|
(3,375)
|
|
|
(1,293)
|
|
|
(1,956)
|
|
TOTAL
LIABILITIES AND DEFICIT
|
|
$
|
10,865
|
|
|
$
|
12,756
|
|
|
$
|
11,337
|
|
|
|
|
|
|
|
|
Total common shares
outstanding
|
|
107.0
|
|
|
106.6
|
|
|
106.7
|
|
Sears Holdings
Corporation
|
Segment
Results
|
(Unaudited)
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
October 29, 2016
|
millions, except
store data
|
Kmart
|
|
Sears
Domestic
|
|
Sears
Holdings
|
Merchandise sales and
services
|
$
|
1,888
|
|
|
$
|
3,141
|
|
|
$
|
5,029
|
|
|
|
|
|
|
|
Cost of sales, buying
and occupancy
|
1,605
|
|
|
2,462
|
|
|
4,067
|
|
Gross margin
dollars
|
283
|
|
|
679
|
|
|
962
|
|
Gross margin
rate
|
15.0
|
%
|
|
21.6
|
%
|
|
19.1
|
%
|
|
|
|
|
|
|
Selling and
administrative
|
555
|
|
|
988
|
|
|
1,543
|
|
Selling and
administrative expense as a percentage of total
revenues
|
29.4
|
%
|
|
31.5
|
%
|
|
30.7
|
%
|
Depreciation and
amortization
|
17
|
|
|
74
|
|
|
91
|
|
Impairment
charges
|
3
|
|
|
—
|
|
|
3
|
|
Gain on sales of
assets
|
(30)
|
|
|
(21)
|
|
|
(51)
|
|
Total costs and expenses
|
2,150
|
|
|
3,503
|
|
|
5,653
|
|
Operating
loss
|
$
|
(262)
|
|
|
$
|
(362)
|
|
|
$
|
(624)
|
|
|
|
|
|
|
|
Number of:
|
|
|
|
|
|
Kmart
Stores
|
801
|
|
|
—
|
|
|
801
|
|
Full-Line
Stores
|
—
|
|
|
676
|
|
|
676
|
|
Specialty
Stores
|
—
|
|
|
26
|
|
|
26
|
|
Total
Stores
|
801
|
|
|
702
|
|
|
1,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
October 31, 2015
|
millions, except
store data
|
Kmart
|
|
Sears
Domestic
|
|
Sears
Holdings
|
Merchandise sales and
services
|
$
|
2,247
|
|
|
$
|
3,503
|
|
|
$
|
5,750
|
|
|
|
|
|
|
|
Cost of sales, buying
and occupancy
|
1,774
|
|
|
2,714
|
|
|
4,488
|
|
Gross margin
dollars
|
473
|
|
|
789
|
|
|
1,262
|
|
Gross margin
rate
|
21.1
|
%
|
|
22.5
|
%
|
|
21.9
|
%
|
|
|
|
|
|
|
Selling and
administrative
|
585
|
|
|
1,045
|
|
|
1,630
|
|
Selling and
administrative expense as a percentage of total
revenues
|
26.0
|
%
|
|
29.8
|
%
|
|
28.3
|
%
|
Depreciation and
amortization
|
17
|
|
|
77
|
|
|
94
|
|
Impairment
charges
|
10
|
|
|
7
|
|
|
17
|
|
Gain on sales of
assets
|
(12)
|
|
|
(85)
|
|
|
(97)
|
|
Total costs and expenses
|
2,374
|
|
|
3,758
|
|
|
6,132
|
|
Operating
loss
|
$
|
(127)
|
|
|
$
|
(255)
|
|
|
$
|
(382)
|
|
|
|
|
|
|
|
Number of:
|
|
|
|
|
|
Kmart
Stores
|
952
|
|
|
—
|
|
|
952
|
|
Full-Line
Stores
|
—
|
|
|
708
|
|
|
708
|
|
Specialty
Stores
|
—
|
|
|
27
|
|
|
27
|
|
Total
Stores
|
952
|
|
|
735
|
|
|
1,687
|
|
|
|
|
|
|
|
Sears Holdings
Corporation
|
Segment
Results
|
(Unaudited)
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
|
|
|
|
|
|
39 Weeks Ended
October 29, 2016
|
millions, except
store data
|
Kmart
|
|
Sears
Domestic
|
|
Sears
Holdings
|
Merchandise sales and
services
|
$
|
6,248
|
|
|
$
|
9,838
|
|
|
$
|
16,086
|
|
|
|
|
|
|
|
Cost of sales, buying
and occupancy
|
5,100
|
|
|
7,587
|
|
|
12,687
|
|
Gross margin
dollars
|
1,148
|
|
|
2,251
|
|
|
3,399
|
|
Gross margin
rate
|
18.4
|
%
|
|
22.9
|
%
|
|
21.1
|
%
|
|
|
|
|
|
|
Selling and
administrative
|
1,597
|
|
|
2,933
|
|
|
4,530
|
|
Selling and
administrative expense as a percentage of total
revenues
|
25.6
|
%
|
|
29.8
|
%
|
|
28.2
|
%
|
Depreciation and
amortization
|
51
|
|
|
227
|
|
|
278
|
|
Impairment
charges
|
7
|
|
|
11
|
|
|
18
|
|
Gain on sales of
assets
|
(120)
|
|
|
(46)
|
|
|
(166)
|
|
Total costs and expenses
|
6,635
|
|
|
10,712
|
|
|
17,347
|
|
Operating
loss
|
$
|
(387)
|
|
|
$
|
(874)
|
|
|
$
|
(1,261)
|
|
|
|
|
|
|
|
Number of:
|
|
|
|
|
|
Kmart
Stores
|
801
|
|
|
—
|
|
|
801
|
|
Full-Line
Stores
|
—
|
|
|
676
|
|
|
676
|
|
Specialty
Stores
|
—
|
|
|
26
|
|
|
26
|
|
Total
Stores
|
801
|
|
|
702
|
|
|
1,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39 Weeks Ended
October 31, 2015
|
millions, except
store data
|
Kmart
|
|
Sears
Domestic
|
|
Sears
Holdings
|
Merchandise sales and
services
|
$
|
7,062
|
|
|
$
|
10,781
|
|
|
$
|
17,843
|
|
|
|
|
|
|
|
Cost of sales, buying
and occupancy
|
5,562
|
|
|
8,066
|
|
|
13,628
|
|
Gross margin
dollars
|
1,500
|
|
|
2,715
|
|
|
4,215
|
|
Gross margin
rate
|
21.2
|
%
|
|
25.2
|
%
|
|
23.6
|
%
|
|
|
|
|
|
|
Selling and
administrative
|
1,802
|
|
|
3,203
|
|
|
5,005
|
|
Selling and
administrative expense as a percentage of total
revenues
|
25.5
|
%
|
|
29.7
|
%
|
|
28.1
|
%
|
Depreciation and
amortization
|
56
|
|
|
274
|
|
|
330
|
|
Impairment
charges
|
12
|
|
|
59
|
|
|
71
|
|
Gain on sales of
assets
|
(173)
|
|
|
(557)
|
|
|
(730)
|
|
Total costs and expenses
|
7,259
|
|
|
11,045
|
|
|
18,304
|
|
Operating
loss
|
$
|
(197)
|
|
|
$
|
(264)
|
|
|
$
|
(461)
|
|
|
|
|
|
|
|
Number of:
|
|
|
|
|
|
Kmart
Stores
|
952
|
|
|
—
|
|
|
952
|
|
Full-Line
Stores
|
—
|
|
|
708
|
|
|
708
|
|
Specialty
Stores
|
—
|
|
|
27
|
|
|
27
|
|
Total
Stores
|
952
|
|
|
735
|
|
|
1,687
|
|
|
|
|
|
|
|
Sears Holdings
Corporation
|
Adjusted
EBITDA
|
(Unaudited)
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
13 Weeks
Ended
|
|
39 Weeks
Ended
|
millions
|
October
29,
2016
|
|
October
31,
2015
|
|
October
29,
2016
|
|
October
31,
2015
|
Net loss attributable
to Holdings per statement of operations
|
$
|
(748)
|
|
|
$
|
(454)
|
|
|
$
|
(1,614)
|
|
|
$
|
(549)
|
|
Income attributable
to noncontrolling interests
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Income tax expense
(benefit)
|
11
|
|
|
14
|
|
|
39
|
|
|
(189)
|
|
Interest
expense
|
105
|
|
|
74
|
|
|
289
|
|
|
249
|
|
Interest and
investment (income) loss
|
8
|
|
|
(17)
|
|
|
25
|
|
|
27
|
|
Operating
loss
|
(624)
|
|
|
(382)
|
|
|
(1,261)
|
|
|
(461)
|
|
Depreciation and
amortization
|
91
|
|
|
94
|
|
|
278
|
|
|
330
|
|
Gain on sales of
assets
|
(51)
|
|
|
(97)
|
|
|
(166)
|
|
|
(730)
|
|
Before excluded
items
|
(584)
|
|
|
(385)
|
|
|
(1,149)
|
|
|
(861)
|
|
|
|
|
|
|
|
|
|
Closed store reserve
and severance
|
113
|
|
|
(1)
|
|
|
182
|
|
|
36
|
|
Pension
expense
|
72
|
|
|
58
|
|
|
216
|
|
|
172
|
|
Other(1)
|
43
|
|
|
2
|
|
|
52
|
|
|
(87)
|
|
Amortization of
deferred Seritage gain
|
(22)
|
|
|
(23)
|
|
|
(66)
|
|
|
(30)
|
|
Impairment
charges
|
3
|
|
|
17
|
|
|
18
|
|
|
71
|
|
Adjusted
EBITDA
|
$
|
(375)
|
|
|
$
|
(332)
|
|
|
$
|
(747)
|
|
|
$
|
(699)
|
|
|
|
(1)
|
The 13- and 39- week
periods ended October 29, 2016 consisted of expenses associated
with legal matters, transaction costs associated with strategic
initiatives and other expenses, while the 13- and 39- week periods
ended October 31, 2015 consisted of one-time credits from vendors,
expenses associated with legal matters, transactions costs
associated with strategic initiatives and other
expenses.
|
Sears Holdings
Corporation
|
Adjusted
EBITDA
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
|
|
13 Weeks
Ended
|
|
October 29,
2016
|
|
October 31,
2015
|
millions
|
Kmart
|
Sears
Domestic
|
Sears
Holdings
|
|
Kmart
|
Sears
Domestic
|
Sears
Holdings
|
Operating loss per
statement of operations
|
$
|
(262)
|
|
$
|
(362)
|
|
$
|
(624)
|
|
|
$
|
(127)
|
|
$
|
(255)
|
|
$
|
(382)
|
|
Depreciation and
amortization
|
17
|
|
74
|
|
91
|
|
|
17
|
|
77
|
|
94
|
|
Gain on sales of
assets
|
(30)
|
|
(21)
|
|
(51)
|
|
|
(12)
|
|
(85)
|
|
(97)
|
|
Before excluded
items
|
(275)
|
|
(309)
|
|
(584)
|
|
|
(122)
|
|
(263)
|
|
(385)
|
|
|
|
|
|
|
|
|
|
Closed store reserve
and severance
|
107
|
|
6
|
|
113
|
|
|
1
|
|
(2)
|
|
(1)
|
|
Pension
expense
|
—
|
|
72
|
|
72
|
|
|
—
|
|
58
|
|
58
|
|
Other(1)
|
—
|
|
43
|
|
43
|
|
|
1
|
|
1
|
|
2
|
|
Amortization of
deferred Seritage gain
|
(4)
|
|
(18)
|
|
(22)
|
|
|
(5)
|
|
(18)
|
|
(23)
|
|
Impairment
charges
|
3
|
|
—
|
|
3
|
|
|
10
|
|
7
|
|
17
|
|
Adjusted
EBITDA
|
$
|
(169)
|
|
$
|
(206)
|
|
$
|
(375)
|
|
|
$
|
(115)
|
|
$
|
(217)
|
|
$
|
(332)
|
|
% to
revenues
|
(9.0)
|
%
|
(6.6)
|
%
|
(7.5)
|
%
|
|
(5.1)
|
%
|
(6.2)
|
%
|
(5.8)
|
%
|
|
|
|
39 Weeks
Ended
|
|
October 29,
2016
|
|
October 31,
2015
|
millions
|
Kmart
|
Sears
Domestic
|
Sears
Holdings
|
|
Kmart
|
Sears
Domestic
|
Sears
Holdings
|
Operating loss per
statement of operations
|
$
|
(387)
|
|
$
|
(874)
|
|
$
|
(1,261)
|
|
|
$
|
(197)
|
|
$
|
(264)
|
|
$
|
(461)
|
|
Depreciation and
amortization
|
51
|
|
227
|
|
278
|
|
|
56
|
|
274
|
|
330
|
|
Gain on sales of
assets
|
(120)
|
|
(46)
|
|
(166)
|
|
|
(173)
|
|
(557)
|
|
(730)
|
|
Before excluded
items
|
(456)
|
|
(693)
|
|
(1,149)
|
|
|
(314)
|
|
(547)
|
|
(861)
|
|
|
|
|
|
|
|
|
|
Closed store reserve
and severance
|
159
|
|
23
|
|
182
|
|
|
42
|
|
(6)
|
|
36
|
|
Pension
expense
|
—
|
|
216
|
|
216
|
|
|
—
|
|
172
|
|
172
|
|
Other(1)
|
8
|
|
44
|
|
52
|
|
|
9
|
|
(96)
|
|
(87)
|
|
Amortization of
deferred Seritage gain
|
(13)
|
|
(53)
|
|
(66)
|
|
|
(6)
|
|
(24)
|
|
(30)
|
|
Impairment
charges
|
7
|
|
11
|
|
18
|
|
|
12
|
|
59
|
|
71
|
|
Adjusted
EBITDA
|
$
|
(295)
|
|
$
|
(452)
|
|
$
|
(747)
|
|
|
$
|
(257)
|
|
$
|
(442)
|
|
$
|
(699)
|
|
% to
revenues
|
(4.7)
|
%
|
(4.6)
|
%
|
(4.6)
|
%
|
|
(3.6)
|
%
|
(4.1)
|
%
|
(3.9)
|
%
|
|
|
(1)
|
The 13- and 39- week
periods ended October 29, 2016 consisted of expenses associated
with legal matters, transaction costs associated with strategic
initiatives and other expenses, while the 13- and 39- week periods
ended October 31, 2015 consisted of one-time credits from vendors,
expenses associated with legal matters, transactions costs
associated with strategic initiatives and other
expenses.
|
Sears Holdings
Corporation
|
Adjusted Earnings
per Share
|
(Unaudited)
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
13 Weeks Ended
October 29, 2016
|
|
|
Adjustments
|
|
millions, except
per share data
|
GAAP
|
Pension
Expense
|
Closed Store
Reserve, Store Impairments and Severance
|
Gain on Sales of
Assets
|
Mark-to-Market
Adjustments
|
Amortization of
Deferred Seritage Gain
|
Other(1)
|
Tax
Matters
|
As
Adjusted
|
Gross margin
impact
|
$
|
962
|
|
$
|
—
|
|
$
|
38
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(22)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
978
|
|
Selling and
administrative impact
|
1,543
|
|
(72)
|
|
(75)
|
|
—
|
|
—
|
|
—
|
|
(43)
|
|
—
|
|
1,353
|
|
Depreciation and
amortization impact
|
91
|
|
—
|
|
(2)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
89
|
|
Impairment charges
impact
|
3
|
|
—
|
|
(3)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Gain on sales of
assets impact
|
(51)
|
|
—
|
|
—
|
|
16
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(35)
|
|
Operating loss
impact
|
(624)
|
|
72
|
|
118
|
|
(16)
|
|
—
|
|
(22)
|
|
43
|
|
—
|
|
(429)
|
|
Interest and
investment loss impact
|
(8)
|
|
—
|
|
—
|
|
—
|
|
9
|
|
—
|
|
—
|
|
—
|
|
1
|
|
Income tax expense
impact
|
(11)
|
|
(27)
|
|
(44)
|
|
6
|
|
(3)
|
|
8
|
|
(16)
|
|
287
|
|
200
|
|
After tax and
noncontrolling interests impact
|
(748)
|
|
45
|
|
74
|
|
(10)
|
|
6
|
|
(14)
|
|
27
|
|
287
|
|
(333)
|
|
Diluted loss per
share impact
|
$
|
(6.99)
|
|
$
|
0.42
|
|
$
|
0.69
|
|
$
|
(0.09)
|
|
$
|
0.06
|
|
$
|
(0.13)
|
|
$
|
0.25
|
|
$
|
2.68
|
|
$
|
(3.11)
|
|
|
|
(1)
|
Consists of expenses
associated with legal matters, transaction costs associated with
strategic initiatives and other expenses.
|
|
13 Weeks Ended
October 31, 2015
|
|
|
Adjustments
|
|
millions, except
per share data
|
GAAP
|
Pension
Expense
|
Closed Store
Reserve, Store Impairments and Severance
|
Gain on Sales of
Assets
|
Mark-to-Market
Adjustments
|
Amortization of
Deferred Seritage Gain
|
Other(1)
|
Tax
Matters
|
As
Adjusted
|
Gross margin
impact
|
$
|
1,262
|
|
$
|
—
|
|
$
|
6
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(23)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,245
|
|
Selling and
administrative impact
|
1,630
|
|
(58)
|
|
7
|
|
—
|
|
—
|
|
—
|
|
(2)
|
|
—
|
|
1,577
|
|
Depreciation and
amortization impact
|
94
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
94
|
|
Impairment charges
impact
|
17
|
|
—
|
|
(17)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Gain on sales of
assets impact
|
(97)
|
|
—
|
|
—
|
|
83
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(14)
|
|
Operating loss
impact
|
(382)
|
|
58
|
|
16
|
|
(83)
|
|
—
|
|
(23)
|
|
2
|
|
—
|
|
(412)
|
|
Interest and
investment income impact
|
17
|
|
—
|
|
—
|
|
—
|
|
(17)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Income tax expense
impact
|
(14)
|
|
(22)
|
|
(6)
|
|
31
|
|
6
|
|
9
|
|
(1)
|
|
179
|
|
182
|
|
After tax and
noncontrolling interests impact
|
(454)
|
|
36
|
|
10
|
|
(52)
|
|
(11)
|
|
(14)
|
|
1
|
|
179
|
|
(305)
|
|
Diluted loss per
share impact
|
$
|
(4.26)
|
|
$
|
0.34
|
|
$
|
0.09
|
|
$
|
(0.49)
|
|
$
|
(0.10)
|
|
$
|
(0.13)
|
|
$
|
0.01
|
|
$
|
1.68
|
|
$
|
(2.86)
|
|
|
|
(1)
|
Consists of
transaction costs associated with strategic initiatives, expenses
associated with legal matters and other expenses.
|
Sears Holdings
Corporation
|
Adjusted Earnings
per Share
|
(Unaudited)
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
39 Weeks Ended
October 29, 2016
|
|
|
Adjustments
|
|
millions, except
per share data
|
GAAP
|
Pension
Expense
|
Closed Store
Reserve, Store Impairments and Severance
|
Gain on Sales of
Assets
|
Mark-to-Market
Adjustments
|
Amortization of
Deferred Seritage Gain
|
Other(1)
|
Tax
Matters
|
As
Adjusted
|
Gross margin
impact
|
$
|
3,399
|
|
$
|
—
|
|
$
|
102
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(66)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,435
|
|
Selling and
administrative impact
|
4,530
|
|
(216)
|
|
(80)
|
|
—
|
|
—
|
|
—
|
|
(52)
|
|
—
|
|
4,182
|
|
Depreciation and
amortization impact
|
278
|
|
—
|
|
(7)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
271
|
|
Impairment
charges
|
18
|
|
—
|
|
(18)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Gain on sales of
assets impact
|
(166)
|
|
—
|
|
—
|
|
63
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(103)
|
|
Operating loss
impact
|
(1,261)
|
|
216
|
|
207
|
|
(63)
|
|
—
|
|
(66)
|
|
52
|
|
—
|
|
(915)
|
|
Interest and
investment loss impact
|
(25)
|
|
—
|
|
—
|
|
—
|
|
29
|
|
—
|
|
—
|
|
—
|
|
4
|
|
Income tax expense
impact
|
(39)
|
|
(81)
|
|
(78)
|
|
24
|
|
(11)
|
|
25
|
|
(20)
|
|
630
|
|
450
|
|
After tax and
noncontrolling interests impact
|
(1,614)
|
|
135
|
|
129
|
|
(39)
|
|
18
|
|
(41)
|
|
32
|
|
630
|
|
(750)
|
|
Diluted loss per
share impact
|
$
|
(15.10)
|
|
$
|
1.26
|
|
$
|
1.21
|
|
$
|
(0.36)
|
|
$
|
0.17
|
|
$
|
(0.39)
|
|
$
|
0.30
|
|
$
|
5.89
|
|
$
|
(7.02)
|
|
|
|
(1)
|
Consists of expenses
associated with legal matters, transaction costs associated with
strategic initiatives and other expenses.
|
|
39 Weeks Ended
October 31, 2015
|
|
|
Adjustments
|
|
millions, except
per share data
|
GAAP
|
Pension
Expense
|
Closed Store
Reserve, Store Impairments and Severance
|
Gain on Sales of
Assets
|
Mark-to-Market
Adjustments
|
Amortization of
Deferred Seritage Gain
|
Other(1)
|
Tax
Matters
|
As
Adjusted
|
Gross margin
impact
|
$
|
4,215
|
|
$
|
—
|
|
$
|
17
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(30)
|
|
$
|
(126)
|
|
$
|
—
|
|
$
|
4,076
|
|
Selling and
administrative impact
|
5,005
|
|
(172)
|
|
(19)
|
|
—
|
|
—
|
|
—
|
|
(39)
|
|
—
|
|
4,775
|
|
Depreciation and
amortization impact
|
330
|
|
—
|
|
(2)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
328
|
|
Impairment charges
impact
|
71
|
|
—
|
|
(71)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Gain on sales of
assets impact
|
(730)
|
|
—
|
|
—
|
|
687
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(43)
|
|
Operating loss
impact
|
(461)
|
|
172
|
|
109
|
|
(687)
|
|
—
|
|
(30)
|
|
(87)
|
|
—
|
|
(984)
|
|
Interest and
investment loss impact
|
(27)
|
|
—
|
|
—
|
|
—
|
|
25
|
|
—
|
|
—
|
|
—
|
|
(2)
|
|
Income tax benefit
impact
|
189
|
|
(65)
|
|
(41)
|
|
258
|
|
(9)
|
|
11
|
|
33
|
|
87
|
|
463
|
|
After tax and
noncontrolling interests impact
|
(549)
|
|
107
|
|
68
|
|
(429)
|
|
16
|
|
(19)
|
|
(54)
|
|
87
|
|
(773)
|
|
Diluted loss per
share impact
|
$
|
(5.15)
|
|
$
|
1.00
|
|
$
|
0.64
|
|
$
|
(4.03)
|
|
$
|
0.15
|
|
$
|
(0.18)
|
|
$
|
(0.51)
|
|
$
|
0.82
|
|
$
|
(7.26)
|
|
|
|
(1)
|
Consists of one-time
credits from vendors, transaction costs associated with strategic
initiatives, expenses associated with legal matters, and other
expenses.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/sears-holdings-reports-third-quarter-2016-results-300375086.html
SOURCE Sears Holdings Corporation