HOFFMAN ESTATES, Ill.,
May 25, 2017 /PRNewswire/
-- Sears Holdings Corporation ("Holdings," "we," "us," "our,"
or the "Company") (NASDAQ: SHLD) today announced financial results
for its first quarter ended April 29, 2017. 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 net income attributable to Holdings'
shareholders of $244 million
($2.28 earnings per diluted share)
for the first quarter of 2017 compared to a net loss attributable
to Holdings' shareholders of $471
million ($4.41 loss per
diluted share) for the prior year first 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 $230 million
($2.15 loss per diluted share) for
the first quarter of 2017 compared to a net loss attributable to
Holdings' shareholders of $199
million ($1.86 loss per
diluted share) in the prior year first quarter. Adjusted EBITDA was
$(222) million in the first quarter
of 2017, as compared to $(181)
million in the prior year first quarter.
Edward S. Lampert, Holdings'
Chairman and Chief Executive Officer, said, "While this was
certainly a challenging quarter for our Company, it was also one
that clearly demonstrated our commitment to return Sears Holdings
to solid financial footing. We recognize that we need to accelerate
our efforts to improve our operational performance and are moving
decisively with our $1.25 billion
restructuring program."
Highlights since the beginning of the first quarter include:
- Delivered significant progress on our strategic restructuring
program, with $700 million in
annualized cost savings already actioned to date, and announced
incremental actions to increase our annualized cost savings target
to $1.25 billion from $1.0 billion;
- Paydown of approximately $418
million of term loans outstanding under our revolving credit
facility;
- Entered into an agreement with Metropolitan Life Insurance
Company ("MLIC") to annuitize $515
million of pension liability, which serves to reduce the
overall size of the Company's pension plan, reduce future cost
volatility and reduce future plan administrative expenses;
- Reached an agreement to extend the maturity of $400 million of our $500
million 2016 Secured Loan Facility from July 2017 to January
2018, with the option to extend further to July 2018;
- Expanded our Shop Your Way VIP program to reward our members
based on spend and frequency, which has resulted in over a 50%
increase in the number of VIP members in the first quarter,
compared to the same period last year;
- Opened the first DieHard Auto Center in San Antonio, Texas, with an innovative store
format that offers state-of-the-art technology and services, that,
combined with our experienced associates, can help today's drivers
make the right choices for their vehicle's needs; and
- Named a 2017 ENERGY STAR Partner of the Year-Sustained
Excellence Award winner for continued leadership in protecting our
environment through superior energy efficiency achievements.
Mr. Lampert added, "We remain focused on driving the growth of
our Shop Your Way ecosystem and are pleased with the traction we
gained with our VIP membership base, which more than doubled in the
last year."
Rob Riecker, Holdings' Chief
Financial Officer, said, "During the first quarter we took decisive
actions to reduce our cost base and drive operational efficiencies
which allowed us to make significant progress on our restructuring
program. We also remained focused on increasing our financial
flexibility and creating value from our asset base to ensure we
continue to meet our financial obligations and fund our
transformation. We will continue to evaluate our options to deliver
further improvements to our operational performance and balance
sheet."
Financial Results
For the quarter ended April 29, 2017, we generated revenues
of $4.3 billion compared to revenues
of $5.4 billion for the quarter ended
April 30, 2016. The year-over-year decline in revenues was
primarily driven by having fewer Kmart and Sears Full-line stores
in operation, which accounted for $557
million of the decline, as well as an 11.9% decline in
comparable store sales during the quarter, which accounted for
$417 million of the decline.
At Kmart, comparable store sales decreased 11.2% during the
first quarter of 2017, primarily driven by declines in the grocery
& household, pharmacy, apparel and home categories. Sears
Domestic comparable store sales decreased 12.4% during the quarter,
primarily driven by decreases in the home appliances, apparel and
lawn & garden categories.
During the first quarter, gross margin decreased $247 million compared to the prior year first
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, which was largely attributed to a decrease in
occupancy leverage. Excluding significant items noted in our
Adjusted Earnings Per Share tables, the decline in Kmart segment
margin was primarily driven by declines in our apparel and grocery
& household categories, while the decline at Sears Domestic was
primarily driven by declines in the home appliances, footwear and
tools categories. Both formats experienced an increase in
promotional markdowns due to competitive pressures in the retail
environment.
Selling and administrative expenses decreased $236 million in the first quarter of 2017
compared to the prior year quarter driven by the strategic actions
we have taken to improve our operational efficiency and reduce our
costs. Excluding significant items noted in our Adjusted Earnings
Per Share tables, selling and administrative expenses declined
$250 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 total cash balances were $264 million at April 29, 2017, compared
with $286 million at January 28,
2017. Short-term borrowings totaled $551
million at the end of the first quarter of 2017, consisting
of $536 million of revolver
borrowings and $15 million of
commercial paper outstanding.
Merchandise inventories were $3.9
billion at April 29, 2017, compared to $5.0 billion at April 30, 2016, while
merchandise payables were $961
million and $1.3 billion at
April 29, 2017 and April 30, 2016, respectively.
At April 29, 2017, we had utilized approximately
$1.0 billion of our $1.5 billion revolving credit facility due in
2020, consisting of $536 million of
borrowings and $477 million of
letters of credit outstanding. The amount available to borrow under
our credit facility was approximately $70
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 $4.2 billion at
April 29, 2017 and January 28, 2017, respectively.
The Company had total liquidity and liquid assets of
$3.7 billion at April 29, 2017,
compared to $3.6 billion at
January 28, 2017.
Update on Restructuring Program Initiatives and Liquidity
Actions
In April 2017, we provided an
update to our restructuring program, including increasing our
annualized cost savings target to $1.25
billion. The initiatives being taken to realize our
cost savings target include: the closure of under-performing
stores, including the previously announced closure of 150
non-profitable stores, which has been completed; the closure of 92
under-performing pharmacy operations in certain Kmart stores and
the closure of 50 Sears Auto Center locations, simplification of
the organizational structure of Sears Holdings through
consolidation of the leadership of retail operations for Sears and
Kmart and elimination of certain senior management roles; and a
comprehensive review of the Company's value chain to identify
broader opportunities for competitively priced products that drive
operational efficiencies.
On May 15, 2017, the Company
entered into an agreement to annuitize $515
million of pension liability with MLIC, under which MLIC
will pay future pension benefit payments to approximately 51,000
retirees. This action is expected to have an immaterial impact on
the funded status of our total pension obligations, but will serve
to reduce the size of the Company's combined pension plan, reduce
future cost volatility, and reduce future plan administrative
expenses.
In addition, the Company recently reached an agreement to extend
the maturity of $400 million of our
$500 million 2016 Secured Loan
Facility from July 2017 to January
2018, with the option to further extend the loan until
July 2018.
We also continue to explore ways to unlock value across a range
of assets, including exploring ways to maximize the value of our
Home Services and Sears Auto Centers businesses, as well as our
Kenmore and DieHard brands through partnerships or other means of
externalization that could expand distribution of our brands and
service offerings to realize significant growth.
Adjusted EBITDA
In addition to our net income (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
financial 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 earnings (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 first quarter of 2017 included additional rent expense of
approximately $45 million, while the
first quarter of 2016 included additional rent expense and assigned
subtenant rental income of approximately $54
million. 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 35 properties, which is
estimated to reduce the rent expense by approximately $24 million on an annual basis. We have also
exercised our right to terminate the lease on 36 properties, which
is estimated to reduce rent expense by approximately $12 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 monetization of our real estate, additional debt financing
actions, asset securitizations or other potential transactions or
otherwise, our intention to explore potential partnerships or other
transactions involving our Kenmore and DieHard brands and our Sears
Home Services and Sears Auto Centers businesses, the impact of the
agreement with MLIC 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
|
millions, except
per share data
|
April 29,
2017
|
|
April 30,
2016
|
REVENUES
|
|
|
|
Merchandise sales and
services
|
$
|
4,301
|
|
|
$
|
5,394
|
|
COSTS AND
EXPENSES
|
|
|
|
Cost of sales, buying
and occupancy
|
3,371
|
|
|
4,217
|
|
Gross margin
dollars
|
930
|
|
|
1,177
|
|
Gross margin
rate
|
21.6
|
%
|
|
21.8
|
%
|
Selling and
administrative
|
1,267
|
|
|
1,503
|
|
Selling and
administrative expense as a percentage of total
revenues
|
29.5
|
%
|
|
27.9
|
%
|
Depreciation and
amortization
|
87
|
|
|
95
|
|
Impairment
charges
|
15
|
|
|
8
|
|
Gain on sales of
assets
|
(741)
|
|
|
(61)
|
|
Total costs and
expenses
|
3,999
|
|
|
5,762
|
|
Operating income
(loss)
|
302
|
|
|
(368)
|
|
Interest
expense
|
(128)
|
|
|
(85)
|
|
Interest and
investment loss
|
(2)
|
|
|
(4)
|
|
Other
income
|
—
|
|
|
1
|
|
Income (loss) before
income taxes
|
172
|
|
|
(456)
|
|
Income tax benefit
(expense)
|
72
|
|
|
(15)
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS
|
$
|
244
|
|
|
$
|
(471)
|
|
NET INCOME (LOSS)
PER COMMON SHARE ATTRIBUTABLE TO HOLDINGS'
SHAREHOLDERS
|
|
|
|
Diluted earnings
(loss) per share
|
$
|
2.28
|
|
|
$
|
(4.41)
|
|
Diluted weighted
average common shares outstanding
|
107.2
|
|
|
106.8
|
|
Sears Holdings
Corporation
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
|
millions
|
|
April 29,
2017
|
|
April 30,
2016
|
|
January 28,
2017
|
ASSETS
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
236
|
|
|
$
|
286
|
|
|
$
|
286
|
|
Restricted
cash
|
|
28
|
|
|
—
|
|
|
—
|
|
Accounts
receivable
|
|
479
|
|
|
437
|
|
|
466
|
|
Merchandise
inventories
|
|
3,884
|
|
|
5,028
|
|
|
3,959
|
|
Prepaid expenses and
other current assets
|
|
311
|
|
|
369
|
|
|
285
|
|
Total current
assets
|
|
4,938
|
|
|
6,120
|
|
|
4,996
|
|
Property and
equipment (net of accumulated depreciation and amortization of
$2,803, $2,999 and $2,841)
|
|
2,130
|
|
|
2,520
|
|
|
2,240
|
|
Goodwill
|
|
269
|
|
|
269
|
|
|
269
|
|
Trade names and other
intangible assets
|
|
1,251
|
|
|
1,907
|
|
|
1,521
|
|
Other
assets
|
|
483
|
|
|
359
|
|
|
336
|
|
TOTAL
ASSETS
|
|
$
|
9,071
|
|
|
$
|
11,175
|
|
|
$
|
9,362
|
|
LIABILITIES
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
551
|
|
|
$
|
380
|
|
|
$
|
—
|
|
Current portion of
long-term debt and capitalized lease obligations
|
|
584
|
|
|
66
|
|
|
590
|
|
Merchandise
payables
|
|
961
|
|
|
1,337
|
|
|
1,048
|
|
Other current
liabilities
|
|
1,697
|
|
|
1,737
|
|
|
1,956
|
|
Unearned
revenues
|
|
725
|
|
|
773
|
|
|
748
|
|
Other
taxes
|
|
293
|
|
|
301
|
|
|
339
|
|
Total current
liabilities
|
|
4,811
|
|
|
4,594
|
|
|
4,681
|
|
Long-term debt and
capitalized lease obligations
|
|
3,146
|
|
|
3,312
|
|
|
3,573
|
|
Pension and
postretirement benefits
|
|
1,677
|
|
|
2,137
|
|
|
1,750
|
|
Deferred gain on
sale-leaseback
|
|
504
|
|
|
718
|
|
|
563
|
|
Sale-leaseback
financing obligation
|
|
183
|
|
|
164
|
|
|
235
|
|
Other long-term
liabilities
|
|
1,630
|
|
|
1,718
|
|
|
1,641
|
|
Long-term deferred
tax liabilities
|
|
647
|
|
|
892
|
|
|
743
|
|
Total
Liabilities
|
|
12,598
|
|
|
13,535
|
|
|
13,186
|
|
DEFICIT
|
|
|
|
|
|
|
Total
Deficit
|
|
(3,527)
|
|
|
(2,360)
|
|
|
(3,824)
|
|
TOTAL
LIABILITIES AND DEFICIT
|
|
$
|
9,071
|
|
|
$
|
11,175
|
|
|
$
|
9,362
|
|
|
|
|
|
|
|
|
Total common shares
outstanding
|
|
107.3
|
|
|
106.8
|
|
|
107.1
|
|
Sears Holdings
Corporation
|
Segment
Results
|
(Unaudited)
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
|
13 Weeks Ended
April 29, 2017
|
millions, except
store data
|
Kmart
|
|
Sears
Domestic
|
|
Sears
Holdings
|
Merchandise sales and
services
|
$
|
1,493
|
|
|
$
|
2,808
|
|
|
$
|
4,301
|
|
|
|
|
|
|
|
Cost of sales, buying
and occupancy
|
1,230
|
|
|
2,141
|
|
|
3,371
|
|
Gross margin
dollars
|
263
|
|
|
667
|
|
|
930
|
|
Gross margin
rate
|
17.6
|
%
|
|
23.8
|
%
|
|
21.6
|
%
|
|
|
|
|
|
|
Selling and
administrative
|
392
|
|
|
875
|
|
|
1,267
|
|
Selling and
administrative expense as a percentage of total
revenues
|
26.3
|
%
|
|
31.2
|
%
|
|
29.5
|
%
|
Depreciation and
amortization
|
13
|
|
|
74
|
|
|
87
|
|
Impairment
charges
|
5
|
|
|
10
|
|
|
15
|
|
Gain on sales of
assets
|
(597)
|
|
|
(144)
|
|
|
(741)
|
|
Total costs and expenses
|
1,043
|
|
|
2,956
|
|
|
3,999
|
|
Operating income
(loss)
|
$
|
450
|
|
|
$
|
(148)
|
|
|
$
|
302
|
|
|
|
|
|
|
|
Number of:
|
|
|
|
|
|
Kmart
Stores
|
624
|
|
—
|
|
624
|
|
Full-Line
Stores
|
—
|
|
626
|
|
626
|
|
Specialty
Stores
|
—
|
|
25
|
|
25
|
|
Total
Stores
|
624
|
|
651
|
|
1,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
April 30, 2016
|
millions, except
store data
|
Kmart
|
|
Sears
Domestic
|
|
Sears
Holdings
|
Merchandise sales and
services
|
$
|
2,139
|
|
|
$
|
3,255
|
|
|
$
|
5,394
|
|
|
|
|
|
|
|
Cost of sales, buying
and occupancy
|
1,735
|
|
|
2,482
|
|
|
4,217
|
|
Gross margin
dollars
|
404
|
|
|
773
|
|
|
1,177
|
|
Gross margin
rate
|
18.9
|
%
|
|
23.7
|
%
|
|
21.8
|
%
|
|
|
|
|
|
|
Selling and
administrative
|
544
|
|
|
959
|
|
|
1,503
|
|
Selling and
administrative expense as a percentage of total
revenues
|
25.4
|
%
|
|
29.5
|
%
|
|
27.9
|
%
|
Depreciation and
amortization
|
19
|
|
|
76
|
|
|
95
|
|
Impairment
charges
|
3
|
|
|
5
|
|
|
8
|
|
Gain on sales of
assets
|
(46)
|
|
|
(15)
|
|
|
(61)
|
|
Total costs and expenses
|
2,255
|
|
|
3,507
|
|
|
5,762
|
|
Operating
loss
|
$
|
(116)
|
|
|
$
|
(252)
|
|
|
$
|
(368)
|
|
|
|
|
|
|
|
Number of:
|
|
|
|
|
|
Kmart
Stores
|
896
|
|
—
|
|
896
|
Full-Line
Stores
|
—
|
|
700
|
|
700
|
Specialty
Stores
|
—
|
|
26
|
|
26
|
Total
Stores
|
896
|
|
726
|
|
1,622
|
|
|
|
|
|
|
Sears Holdings
Corporation
|
Adjusted
EBITDA
|
(Unaudited)
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
13 Weeks
Ended
|
millions
|
April 29,
2017
|
|
April 30,
2016
|
Net income (loss)
attributable to Holdings per statement of operations
|
$
|
244
|
|
|
$
|
(471)
|
|
Income tax (benefit)
expense
|
(72)
|
|
|
15
|
|
Interest
expense
|
128
|
|
|
85
|
|
Interest and
investment loss
|
2
|
|
|
4
|
|
Other
income
|
—
|
|
|
(1)
|
|
Operating income
(loss)
|
302
|
|
|
(368)
|
|
Depreciation and
amortization
|
87
|
|
|
95
|
|
Gain on sales of
assets
|
(741)
|
|
|
(61)
|
|
Before excluded
items
|
(352)
|
|
|
(334)
|
|
|
|
|
|
|
|
Closed store reserve
and severance
|
76
|
|
|
87
|
|
Pension
expense
|
45
|
|
|
72
|
|
Other(1)
|
15
|
|
|
8
|
|
Amortization of
deferred Seritage gain
|
(21)
|
|
|
(22)
|
|
Impairment
charges
|
15
|
|
|
8
|
|
Adjusted
EBITDA
|
$
|
(222)
|
|
|
$
|
(181)
|
|
|
|
(1)
|
The 13 weeks ended
April 29, 2017 consisted of transaction costs associated with
strategic initiatives, while the 13 weeks ended April 30, 2016
consisted of expenses associated with legal matters.
|
Sears Holdings
Corporation
|
Adjusted
EBITDA
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
13 Weeks
Ended
|
|
April 29,
2017
|
|
April 30,
2016
|
millions
|
Kmart
|
Sears
Domestic
|
Sears
Holdings
|
|
Kmart
|
Sears
Domestic
|
Sears
Holdings
|
Operating income
(loss) per statement of operations
|
$
|
450
|
|
$
|
(148)
|
|
$
|
302
|
|
|
$
|
(116)
|
|
$
|
(252)
|
|
$
|
(368)
|
|
Depreciation and
amortization
|
13
|
|
74
|
|
87
|
|
|
19
|
|
76
|
|
95
|
|
Gain on sales of
assets
|
(597)
|
|
(144)
|
|
(741)
|
|
|
(46)
|
|
(15)
|
|
(61)
|
|
Before excluded
items
|
(134)
|
|
(218)
|
|
(352)
|
|
|
(143)
|
|
(191)
|
|
(334)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closed store reserve
and severance
|
34
|
|
42
|
|
76
|
|
|
73
|
|
14
|
|
87
|
|
Pension
expense
|
—
|
|
45
|
|
45
|
|
|
—
|
|
72
|
|
72
|
|
Other(1)
|
—
|
|
15
|
|
15
|
|
|
8
|
|
—
|
|
8
|
|
Amortization of
deferred Seritage gain
|
(4)
|
|
(17)
|
|
(21)
|
|
|
(4)
|
|
(18)
|
|
(22)
|
|
Impairment
charges
|
5
|
|
10
|
|
15
|
|
|
3
|
|
5
|
|
8
|
|
Adjusted
EBITDA
|
$
|
(99)
|
|
$
|
(123)
|
|
$
|
(222)
|
|
|
$
|
(63)
|
|
$
|
(118)
|
|
$
|
(181)
|
|
% to
revenues
|
(6.6)%
|
|
(4.4)%
|
|
(5.2)%
|
|
|
(2.9)%
|
|
(3.6)%
|
|
(3.4)%
|
|
|
|
(1)
|
The 13 weeks ended
April 29, 2017 consisted of transaction costs associated with
strategic initiatives, while the 13 weeks ended April 30, 2016
consisted of expenses associated with legal matters.
|
Sears Holdings
Corporation
|
Adjusted Earnings
per Share
|
(Unaudited)
|
|
Amounts are
Preliminary and Subject to Change
|
|
13 Weeks Ended
April 29, 2017
|
|
|
Adjustments
|
|
millions, except
per share data
|
GAAP
|
Pension
Expense
|
Closed Store
Reserve,
Store
Impairments
and
Severance
|
Gain on
Sale of
Trade name
|
Gain on
Sales of
Assets
|
Mark-to-
Market
Adjustments
|
Amortization
of Deferred
Seritage
Gain
|
Other(1)
|
Tax
Matters
|
As
Adjusted
|
Gross margin
impact
|
$
|
930
|
|
$
|
—
|
|
$
|
15
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(21)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
924
|
|
Selling and
administrative impact
|
1,267
|
|
(45)
|
|
(61)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(15)
|
|
—
|
|
1,146
|
|
Depreciation and
amortization impact
|
87
|
|
—
|
|
(6)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
81
|
|
Impairment charges
impact
|
15
|
|
—
|
|
(15)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Gain on sales of
assets impact
|
(741)
|
|
—
|
|
—
|
|
492
|
|
189
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(60)
|
|
Operating income
impact
|
302
|
|
45
|
|
97
|
|
(492)
|
|
(189)
|
|
—
|
|
(21)
|
|
15
|
|
—
|
|
(243)
|
|
Interest and
investment loss impact
|
(2)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5
|
|
—
|
|
—
|
|
—
|
|
3
|
|
Income tax benefit
impact
|
72
|
|
(17)
|
|
(36)
|
|
185
|
|
71
|
|
(2)
|
|
8
|
|
(6)
|
|
(137)
|
|
138
|
|
After tax
impact
|
244
|
|
28
|
|
61
|
|
(307)
|
|
(118)
|
|
3
|
|
(13)
|
|
9
|
|
(137)
|
|
(230)
|
|
Diluted earnings
(loss) per share impact
|
$
|
2.28
|
|
$
|
0.26
|
|
$
|
0.57
|
|
$
|
(2.87)
|
|
$
|
(1.10)
|
|
$
|
0.03
|
|
$
|
(0.12)
|
|
$
|
0.08
|
|
$
|
(1.28)
|
|
$
|
(2.15)
|
|
|
|
(1)
|
Consisted of
transaction costs associated with strategic initiatives.
|
|
13 Weeks Ended
April 30, 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
|
$
|
1,177
|
|
$
|
—
|
|
$
|
60
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(22)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,215
|
|
Selling and
administrative impact
|
1,503
|
|
(72)
|
|
(27)
|
|
—
|
|
—
|
|
—
|
|
(8)
|
|
—
|
|
1,396
|
|
Depreciation and
amortization impact
|
95
|
|
—
|
|
(4)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
91
|
|
Impairment charges
impact
|
8
|
|
—
|
|
(8)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Gain on sales of
assets impact
|
(61)
|
|
—
|
|
—
|
|
26
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(35)
|
|
Operating loss
impact
|
(368)
|
|
72
|
|
99
|
|
(26)
|
|
—
|
|
(22)
|
|
8
|
|
—
|
|
(237)
|
|
Interest and
investment loss impact
|
(4)
|
|
—
|
|
—
|
|
—
|
|
6
|
|
—
|
|
—
|
|
—
|
|
2
|
|
Income tax expense
impact
|
(15)
|
|
(27)
|
|
(37)
|
|
10
|
|
(2)
|
|
8
|
|
(3)
|
|
186
|
|
120
|
|
After tax
impact
|
(471)
|
|
45
|
|
62
|
|
(16)
|
|
4
|
|
(14)
|
|
5
|
|
186
|
|
(199)
|
|
Diluted loss per
share impact
|
$
|
(4.41)
|
|
$
|
0.42
|
|
$
|
0.58
|
|
$
|
(0.15)
|
|
$
|
0.04
|
|
$
|
(0.13)
|
|
$
|
0.05
|
|
$
|
1.74
|
|
$
|
(1.86)
|
|
|
|
(1)
|
Consisted of expenses
associated with legal matters.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/sears-holdings-reports-first-quarter-2017-results-300463626.html
SOURCE Sears Holdings Corporation