HOFFMAN ESTATES, Ill.,
Nov. 30, 2017 /PRNewswire/ -- Sears
Holdings Corporation ("Holdings," "we," "us," "our," or the
"Company") (NASDAQ: SHLD) today announced financial results for its
third quarter ended October 28, 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 a net loss attributable to Holdings'
shareholders of $558 million
($5.19 loss per diluted share) for
the third quarter of 2017 compared to a net loss of $748 million ($6.99
loss per diluted share) for the third quarter of 2016, an
improvement of $190 million. Adjusted
EBITDA improved $100 million to $(275)
million in the third quarter of 2017, from $(375) million in the prior year third quarter.
This marks the second consecutive quarter of at least $100
million improvement in Adjusted EBITDA as the restructuring
actions taken in the first three quarters of 2017 have resulted in
meaningful year-over-year improvement in the Company's
performance.
We generated total revenues of approximately $3.7
billion during the third quarter of 2017, compared with
revenues of $5.0 billion in the prior year quarter, with
store closures contributing to over half of the decline. Revenues
were also negatively impacted by reductions in the number of
pharmacies in open Kmart stores, as well as the reduction in
consumer electronics assortments in both our Kmart and Sears
stores. Total comparable store sales declined 15.3% during the
quarter. Kmart comparable store sales decreased 13.0%, while Sears
comparable store sales declined 17.0%.
Edward S. Lampert, Chairman and
Chief Executive Officer of Holdings, said, "In the third quarter,
we continued to narrow our losses and delivered another quarter of
Adjusted EBITDA improvement of at least $100
million. With the challenging retail landscape continuing to
pressure sales, the improvement in Adjusted EBITDA is reflective of
the success of the strategic priorities we outlined earlier this
year to streamline our operations, reduce inventory and minimize
operating expenses, as well as our commitment to our goal of
restoring positive Adjusted EBITDA in 2018. Our Shop Your Way
membership program and Integrated Retail Strategy remain a key
focus for us in order to meet the needs of our members and provide
our members with the best experience possible throughout the
holiday shopping season."
As we look ahead to the fourth quarter and beyond with a focus
on continued improved performance, we intend to:
- Continue to develop new ways to leverage the Shop Your Way
platform in order to invest marketing dollars at the member level
to optimize returns and improve comparable store sales trends and
associated profitability;
- Diversify revenue streams through third party partnerships in
several of our businesses including Sears Home Services, Innovel,
Kenmore and DieHard;
- Further build on the momentum around our dedicated concept
stores similar to the recently opened Sears Appliances and Mattress
stores in Camp Hill, Pennsylvania
and Honolulu, Hawaii; and
- Maintain extreme cost discipline focus in light of continued
headwinds across the retail sector.
Rob Riecker, Chief Financial
Officer of Holdings, said, "The recently announced agreement with
the Pension Benefit Guaranty Corporation requires an initial
upfront payment to the pension plans which will be secured by 138
properties released to the Company. Once complete, the
estimated contributions of $550
million to the pension plans in 2018 and 2019 is eliminated
(with the exception of a $20 million
payment in July of 2018). Additionally we will be taking
action in the near term with respect to certain upcoming debt
maturities to provide the Company with further financial
flexibility and enhanced liquidity."
Adjusted EBITDA
In addition to our net loss attributable to 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, thereby improving the comparability of year-to-year results
and being more representative of our ongoing performance.
Therefore, we have adjusted our results for significant items 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 2017 and 2016 included additional rent
expense of approximately $40 million
and $48 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 38 properties and also exercised our right to
terminate the lease on 56 properties.
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 strategic restructuring program and anticipated results of
strategic initiatives, our transformation through our integrated
retail strategy, our plans to redeploy and reconfigure our assets,
our plans to market and sell a portion of our existing real estate
assets, our liquidity, our ability to exercise financial
flexibility as we meet our obligations and pursue possible
strategic transactions, 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 other risks 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.
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 28,
2017
|
|
October 29,
2016
|
|
October 28,
2017
|
|
October 29,
2016
|
REVENUES
|
|
|
|
|
|
|
|
Merchandise
sales
|
$
|
2,893
|
|
|
$
|
4,061
|
|
|
$
|
9,820
|
|
|
$
|
13,111
|
|
Services and
other
|
767
|
|
|
968
|
|
|
2,506
|
|
|
2,975
|
|
Total
revenues
|
3,660
|
|
|
5,029
|
|
|
12,326
|
|
|
16,086
|
|
COSTS AND
EXPENSES
|
|
|
|
|
|
|
|
Cost of sales, buying
and occupancy - merchandise sales
|
2,535
|
|
|
3,497
|
|
|
8,320
|
|
|
10,928
|
|
Gross margin dollars
- merchandise sales
|
358
|
|
|
564
|
|
|
1,500
|
|
|
2,183
|
|
Gross margin rate
- merchandise sales
|
12.4%
|
|
|
13.9%
|
|
|
15.3%
|
|
|
16.7%
|
|
Cost of sales and
occupancy - services and other
|
423
|
|
|
570
|
|
|
1,403
|
|
|
1,759
|
|
Gross margin dollars
- services and other
|
344
|
|
|
398
|
|
|
1,103
|
|
|
1,216
|
|
Gross margin rate
- services and other
|
44.9%
|
|
|
41.1%
|
|
|
44.0%
|
|
|
40.9%
|
|
Total cost of sales,
buying and occupancy
|
2,958
|
|
|
4,067
|
|
|
9,723
|
|
|
12,687
|
|
Total gross margin
dollars
|
702
|
|
|
962
|
|
|
2,603
|
|
|
3,399
|
|
Total gross margin
rate
|
19.2%
|
|
|
19.1%
|
|
|
21.1%
|
|
|
21.1%
|
|
Selling and
administrative
|
1,339
|
|
|
1,543
|
|
|
3,975
|
|
|
4,530
|
|
Selling and
administrative expense as a percentage of total
revenues
|
36.6%
|
|
|
30.7%
|
|
|
32.2%
|
|
|
28.2%
|
|
Depreciation and
amortization
|
89
|
|
|
91
|
|
|
259
|
|
|
278
|
|
Impairment
charges
|
9
|
|
|
3
|
|
|
29
|
|
|
18
|
|
Gain on sales of
assets
|
(316)
|
|
|
(51)
|
|
|
(1,437)
|
|
|
(166)
|
|
Total costs and
expenses
|
4,079
|
|
|
5,653
|
|
|
12,549
|
|
|
17,347
|
|
Operating
loss
|
(419)
|
|
|
(624)
|
|
|
(223)
|
|
|
(1,261)
|
|
Interest
expense
|
(136)
|
|
|
(105)
|
|
|
(387)
|
|
|
(289)
|
|
Interest and
investment loss
|
—
|
|
|
(8)
|
|
|
(14)
|
|
|
(25)
|
|
Loss before income
taxes
|
(555)
|
|
|
(737)
|
|
|
(624)
|
|
|
(1,575)
|
|
Income tax (expense)
benefit
|
(3)
|
|
|
(11)
|
|
|
59
|
|
|
(39)
|
|
NET LOSS
ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS
|
$
|
(558)
|
|
|
$
|
(748)
|
|
|
$
|
(565)
|
|
|
$
|
(1,614)
|
|
NET LOSS PER
COMMON SHARE ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS
|
|
|
|
|
|
|
|
Diluted loss per
share
|
$
|
(5.19)
|
|
|
$
|
(6.99)
|
|
|
$
|
(5.27)
|
|
|
$
|
(15.10)
|
|
Diluted weighted
average common shares outstanding
|
107.5
|
|
|
107.0
|
|
|
107.3
|
|
|
106.9
|
|
Sears Holdings
Corporation
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions
|
|
October 28,
2017
|
|
October 29,
2016
|
|
January 28,
2017
|
ASSETS
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
200
|
|
|
$
|
258
|
|
|
$
|
286
|
|
Restricted
cash
|
|
154
|
|
|
—
|
|
|
—
|
|
Accounts
receivable
|
|
378
|
|
|
372
|
|
|
466
|
|
Merchandise
inventories
|
|
3,452
|
|
|
5,032
|
|
|
3,959
|
|
Prepaid expenses and
other current assets
|
|
347
|
|
|
304
|
|
|
285
|
|
Total current
assets
|
|
4,531
|
|
|
5,966
|
|
|
4,996
|
|
Property and
equipment (net of accumulated depreciation and amortization of
$2,451, $2,886 and $2,841)
|
|
1,855
|
|
|
2,392
|
|
|
2,240
|
|
Goodwill
|
|
269
|
|
|
269
|
|
|
269
|
|
Trade names and other
intangible assets
|
|
1,244
|
|
|
1,904
|
|
|
1,521
|
|
Other
assets
|
|
294
|
|
|
334
|
|
|
336
|
|
TOTAL
ASSETS
|
|
$
|
8,193
|
|
|
$
|
10,865
|
|
|
$
|
9,362
|
|
LIABILITIES
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
1,061
|
|
|
$
|
618
|
|
|
$
|
—
|
|
Current portion of
long-term debt and capitalized lease obligations
|
|
1,310
|
|
|
594
|
|
|
590
|
|
Merchandise
payables
|
|
772
|
|
|
1,556
|
|
|
1,048
|
|
Other current
liabilities
|
|
1,534
|
|
|
1,848
|
|
|
1,956
|
|
Unearned
revenues
|
|
676
|
|
|
759
|
|
|
748
|
|
Other
taxes
|
|
290
|
|
|
355
|
|
|
339
|
|
Total current
liabilities
|
|
5,643
|
|
|
5,730
|
|
|
4,681
|
|
Long-term debt and
capitalized lease obligations
|
|
2,032
|
|
|
3,087
|
|
|
3,573
|
|
Pension and
postretirement benefits
|
|
1,641
|
|
|
1,997
|
|
|
1,750
|
|
Deferred gain on
sale-leaseback
|
|
446
|
|
|
656
|
|
|
563
|
|
Sale-leaseback
financing obligation
|
|
247
|
|
|
164
|
|
|
235
|
|
Other long-term
liabilities
|
|
1,557
|
|
|
1,716
|
|
|
1,641
|
|
Long-term deferred
tax liabilities
|
|
634
|
|
|
890
|
|
|
743
|
|
Total
Liabilities
|
|
12,200
|
|
|
14,240
|
|
|
13,186
|
|
DEFICIT
|
|
|
|
|
|
|
Total
Deficit
|
|
(4,007)
|
|
|
(3,375)
|
|
|
(3,824)
|
|
TOTAL
LIABILITIES AND DEFICIT
|
|
$
|
8,193
|
|
|
$
|
10,865
|
|
|
$
|
9,362
|
|
|
|
|
|
|
|
|
Total common shares
outstanding
|
|
107.6
|
|
|
107.0
|
|
|
107.1
|
|
Sears Holdings
Corporation
|
Segment
Results
|
(Unaudited)
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
October 28, 2017
|
millions, except
store data
|
Kmart
|
|
Sears
Domestic
|
|
Sears
Holdings
|
Total
revenues
|
$
|
1,175
|
|
|
$
|
2,485
|
|
|
$
|
3,660
|
|
|
|
|
|
|
|
Total cost of sales,
buying and occupancy
|
986
|
|
|
1,972
|
|
|
2,958
|
|
Gross margin
dollars
|
189
|
|
|
513
|
|
|
702
|
|
Gross margin
rate
|
16.1%
|
|
|
20.6%
|
|
|
19.2%
|
|
|
|
|
|
|
|
Selling and
administrative
|
377
|
|
|
962
|
|
|
1,339
|
|
Selling and
administrative expense as a percentage of total
revenues
|
32.1%
|
|
|
38.7%
|
|
|
36.6%
|
|
Depreciation and
amortization
|
19
|
|
|
70
|
|
|
89
|
|
Impairment
charges
|
3
|
|
|
6
|
|
|
9
|
|
Gain on sales of
assets
|
(132)
|
|
|
(184)
|
|
|
(316)
|
|
Total costs and expenses
|
1,253
|
|
|
2,826
|
|
|
4,079
|
|
Operating
loss
|
$
|
(78)
|
|
|
$
|
(341)
|
|
|
$
|
(419)
|
|
|
|
|
|
|
|
Number of:
|
|
|
|
|
|
Kmart
Stores
|
510
|
|
|
—
|
|
|
510
|
|
Full-Line
Stores
|
—
|
|
|
572
|
|
|
572
|
|
Specialty
Stores
|
—
|
|
|
22
|
|
|
22
|
|
Total
Stores
|
510
|
|
|
594
|
|
|
1,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
October 29, 2016
|
millions, except
store data
|
Kmart
|
|
Sears
Domestic
|
|
Sears
Holdings
|
Total
revenues
|
$
|
1,888
|
|
|
$
|
3,141
|
|
|
$
|
5,029
|
|
|
|
|
|
|
|
Total 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
|
|
|
|
|
|
|
|
Sears Holdings
Corporation
|
Segment
Results
|
(Unaudited)
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
|
|
|
|
|
|
39 Weeks Ended
October 28, 2017
|
millions, except
store data
|
Kmart
|
|
Sears
Domestic
|
|
Sears
Holdings
|
Total
revenues
|
$
|
4,143
|
|
|
$
|
8,183
|
|
|
$
|
12,326
|
|
|
|
|
|
|
|
Total cost of sales,
buying and occupancy
|
3,411
|
|
|
6,312
|
|
|
9,723
|
|
Gross margin
dollars
|
732
|
|
|
1,871
|
|
|
2,603
|
|
Gross margin
rate
|
17.7%
|
|
|
22.9%
|
|
|
21.1%
|
|
|
|
|
|
|
|
Selling and
administrative
|
1,092
|
|
|
2,883
|
|
|
3,975
|
|
Selling and
administrative expense as a percentage of total
revenues
|
26.4%
|
|
|
35.2%
|
|
|
32.2%
|
|
Depreciation and
amortization
|
46
|
|
|
213
|
|
|
259
|
|
Impairment
charges
|
11
|
|
|
18
|
|
|
29
|
|
Gain on sales of
assets
|
(808)
|
|
|
(629)
|
|
|
(1,437)
|
|
Total costs and expenses
|
3,752
|
|
|
8,797
|
|
|
12,549
|
|
Operating income
(loss)
|
$
|
391
|
|
|
$
|
(614)
|
|
|
$
|
(223)
|
|
|
|
|
|
|
|
Number of:
|
|
|
|
|
|
Kmart
Stores
|
510
|
|
|
—
|
|
|
510
|
|
Full-Line
Stores
|
—
|
|
|
572
|
|
|
572
|
|
Specialty
Stores
|
—
|
|
|
22
|
|
|
22
|
|
Total
Stores
|
510
|
|
|
594
|
|
|
1,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39 Weeks Ended
October 29, 2016
|
millions, except
store data
|
Kmart
|
|
Sears
Domestic
|
|
Sears
Holdings
|
Total
revenues
|
$
|
6,248
|
|
|
$
|
9,838
|
|
|
$
|
16,086
|
|
|
|
|
|
|
|
Total 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
|
|
|
|
|
|
|
|
Sears Holdings
Corporation
|
Adjusted
EBITDA
|
(Unaudited)
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
13 Weeks
Ended
|
|
39 Weeks
Ended
|
millions
|
October 28,
2017
|
|
October 29,
2016
|
|
October 28,
2017
|
|
October 29,
2016
|
Net loss attributable
to Holdings per statement of operations
|
$
|
(558)
|
|
|
$
|
(748)
|
|
|
$
|
(565)
|
|
|
$
|
(1,614)
|
|
Income tax expense
(benefit)
|
3
|
|
|
11
|
|
|
(59)
|
|
|
39
|
|
Interest
expense
|
136
|
|
|
105
|
|
|
387
|
|
|
289
|
|
Interest and
investment loss
|
—
|
|
|
8
|
|
|
14
|
|
|
25
|
|
Operating
loss
|
(419)
|
|
|
(624)
|
|
|
(223)
|
|
|
(1,261)
|
|
Depreciation and
amortization
|
89
|
|
|
91
|
|
|
259
|
|
|
278
|
|
Gain on sales of
assets
|
(316)
|
|
|
(51)
|
|
|
(1,437)
|
|
|
(166)
|
|
Before excluded
items
|
(646)
|
|
|
(584)
|
|
|
(1,401)
|
|
|
(1,149)
|
|
|
|
|
|
|
|
|
|
Closed store reserve
and severance
|
115
|
|
|
113
|
|
|
319
|
|
|
182
|
|
Pension
expense
|
248
|
|
|
72
|
|
|
539
|
|
|
216
|
|
Other(1)
|
18
|
|
|
43
|
|
|
9
|
|
|
52
|
|
Amortization of
deferred Seritage gain
|
(19)
|
|
|
(22)
|
|
|
(59)
|
|
|
(66)
|
|
Impairment
charges
|
9
|
|
|
3
|
|
|
29
|
|
|
18
|
|
Adjusted
EBITDA
|
$
|
(275)
|
|
|
$
|
(375)
|
|
|
$
|
(564)
|
|
|
$
|
(747)
|
|
|
|
(1)
|
The 13-week period
ended October 28, 2017 consisted of expenses associated with
natural disasters and transaction costs associated with strategic
initiatives, while the 39-week period ended October 28, 2017
consisted of items associated with legal matters, expenses
associated with natural disasters and transaction costs associated
with strategic initiatives. 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.
|
Sears Holdings
Corporation
|
Adjusted
EBITDA
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
|
|
|
|
|
|
13 Weeks
Ended
|
|
October 28,
2017
|
|
October 29,
2016
|
millions
|
Kmart
|
Sears
Domestic
|
Sears
Holdings
|
|
Kmart
|
Sears
Domestic
|
Sears
Holdings
|
Operating loss per
statement of operations
|
$
|
(78)
|
|
$
|
(341)
|
|
$
|
(419)
|
|
|
$
|
(262)
|
|
$
|
(362)
|
|
$
|
(624)
|
|
Depreciation and
amortization
|
19
|
|
70
|
|
89
|
|
|
17
|
|
74
|
|
91
|
|
Gain on sales of
assets
|
(132)
|
|
(184)
|
|
(316)
|
|
|
(30)
|
|
(21)
|
|
(51)
|
|
Before excluded
items
|
(191)
|
|
(455)
|
|
(646)
|
|
|
(275)
|
|
(309)
|
|
(584)
|
|
|
|
|
|
|
|
|
|
Closed store reserve
and severance
|
87
|
|
28
|
|
115
|
|
|
107
|
|
6
|
|
113
|
|
Pension
expense
|
—
|
|
248
|
|
248
|
|
|
—
|
|
72
|
|
72
|
|
Other(1)
|
9
|
|
9
|
|
18
|
|
|
—
|
|
43
|
|
43
|
|
Amortization of
deferred Seritage gain
|
(3)
|
|
(16)
|
|
(19)
|
|
|
(4)
|
|
(18)
|
|
(22)
|
|
Impairment
charges
|
3
|
|
6
|
|
9
|
|
|
3
|
|
—
|
|
3
|
|
Adjusted
EBITDA
|
$
|
(95)
|
|
$
|
(180)
|
|
$
|
(275)
|
|
|
$
|
(169)
|
|
$
|
(206)
|
|
$
|
(375)
|
|
% to
revenues
|
(8.1)%
|
|
(7.2)%
|
|
(7.5)%
|
|
|
(9.0)%
|
|
(6.6)%
|
|
(7.5)%
|
|
|
|
|
39 Weeks
Ended
|
|
October 28,
2017
|
|
October 29,
2016
|
millions
|
Kmart
|
Sears
Domestic
|
Sears
Holdings
|
|
Kmart
|
Sears
Domestic
|
Sears
Holdings
|
Operating income
(loss) per statement of operations
|
$
|
391
|
|
$
|
(614)
|
|
$
|
(223)
|
|
|
$
|
(387)
|
|
$
|
(874)
|
|
$
|
(1,261)
|
|
Depreciation and
amortization
|
46
|
|
213
|
|
259
|
|
|
51
|
|
227
|
|
278
|
|
Gain on sales of
assets
|
(808)
|
|
(629)
|
|
(1,437)
|
|
|
(120)
|
|
(46)
|
|
(166)
|
|
Before excluded
items
|
(371)
|
|
(1,030)
|
|
(1,401)
|
|
|
(456)
|
|
(693)
|
|
(1,149)
|
|
|
|
|
|
|
|
|
|
Closed store reserve
and severance
|
189
|
|
130
|
|
319
|
|
|
159
|
|
23
|
|
182
|
|
Pension
expense
|
—
|
|
539
|
|
539
|
|
|
—
|
|
216
|
|
216
|
|
Other(1)
|
(15)
|
|
24
|
|
9
|
|
|
8
|
|
44
|
|
52
|
|
Amortization of
deferred Seritage gain
|
(9)
|
|
(50)
|
|
(59)
|
|
|
(13)
|
|
(53)
|
|
(66)
|
|
Impairment
charges
|
11
|
|
18
|
|
29
|
|
|
7
|
|
11
|
|
18
|
|
Adjusted
EBITDA
|
$
|
(195)
|
|
$
|
(369)
|
|
$
|
(564)
|
|
|
$
|
(295)
|
|
$
|
(452)
|
|
$
|
(747)
|
|
% to
revenues
|
(4.7)%
|
|
(4.5)%
|
|
(4.6)%
|
|
|
(4.7)%
|
|
(4.6)%
|
|
(4.6)%
|
|
|
|
(1)
|
The 13-week period
ended October 28, 2017 consisted of expenses associated with
natural disasters and transaction costs associated with strategic
initiatives, while the 39-week period ended October 28, 2017
consisted of items associated with legal matters, expenses
associated with natural disasters and transaction costs associated
with strategic initiatives. 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.
|
Sears Holdings
Corporation
|
Adjusted Earnings
per Share
|
(Unaudited)
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
13 Weeks Ended
October 28, 2017
|
|
|
Adjustments
|
|
millions, except
per share data
|
GAAP
|
Pension
Expense
|
Closed Store
Reserve,
Store
Impairments
and
Severance
|
Gain on
Sales of
Assets
|
Amortization
of Deferred
Seritage Gain
|
Other(1)
|
Tax
Matters
|
As
Adjusted
|
Gross margin
impact
|
$
|
702
|
|
$
|
—
|
|
$
|
60
|
|
$
|
—
|
|
$
|
(19)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
743
|
|
Selling and
administrative impact
|
1,339
|
|
(248)
|
|
(55)
|
|
—
|
|
—
|
|
(18)
|
|
—
|
|
1,018
|
|
Depreciation and
amortization impact
|
89
|
|
—
|
|
(19)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
70
|
|
Impairment charges
impact
|
9
|
|
—
|
|
(9)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Gain on sales of
assets impact
|
(316)
|
|
—
|
|
—
|
|
290
|
|
—
|
|
—
|
|
—
|
|
(26)
|
|
Operating loss
impact
|
(419)
|
|
248
|
|
143
|
|
(290)
|
|
(19)
|
|
18
|
|
—
|
|
(319)
|
|
Income tax expense
impact
|
(3)
|
|
(93)
|
|
(54)
|
|
109
|
|
7
|
|
(7)
|
|
212
|
|
171
|
|
After tax
impact
|
(558)
|
|
155
|
|
89
|
|
(181)
|
|
(12)
|
|
11
|
|
212
|
|
(284)
|
|
Diluted loss per
share impact
|
$
|
(5.19)
|
|
$
|
1.44
|
|
$
|
0.83
|
|
$
|
(1.68)
|
|
$
|
(0.11)
|
|
$
|
0.10
|
|
$
|
1.97
|
|
$
|
(2.64)
|
|
|
|
(1)
|
Consisted of expenses
associated with natural disasters and transaction costs associated
with strategic initiatives.
|
|
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
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)
|
Consisted of expenses
associated with legal matters, transaction costs associated with
strategic initiatives and other expenses.
|
Sears Holdings
Corporation
|
Adjusted Earnings
per Share
|
(Unaudited)
|
|
Amounts are
Preliminary and Subject to Change
|
|
|
39 Weeks Ended
October 28, 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
|
$
|
2,603
|
|
$
|
—
|
|
$
|
164
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(59)
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,708
|
|
Selling and
administrative impact
|
3,975
|
|
(539)
|
|
(155)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(9)
|
|
—
|
|
3,272
|
|
Depreciation and
amortization impact
|
259
|
|
—
|
|
(33)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
226
|
|
Impairment
charges
|
29
|
|
—
|
|
(29)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Gain on sales of
assets impact
|
(1,437)
|
|
—
|
|
—
|
|
492
|
|
794
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(151)
|
|
Operating loss
impact
|
(223)
|
|
539
|
|
381
|
|
(492)
|
|
(794)
|
|
—
|
|
(59)
|
|
9
|
|
—
|
|
(639)
|
|
Interest and
investment loss impact
|
(14)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
17
|
|
—
|
|
—
|
|
—
|
|
3
|
|
Income tax benefit
impact
|
59
|
|
(202)
|
|
(143)
|
|
185
|
|
298
|
|
(6)
|
|
22
|
|
(3)
|
|
174
|
|
384
|
|
After tax
impact
|
(565)
|
|
337
|
|
238
|
|
(307)
|
|
(496)
|
|
11
|
|
(37)
|
|
6
|
|
174
|
|
(639)
|
|
Diluted loss per
share impact
|
$
|
(5.27)
|
|
$
|
3.14
|
|
$
|
2.21
|
|
$
|
(2.86)
|
|
$
|
(4.62)
|
|
$
|
0.10
|
|
$
|
(0.34)
|
|
$
|
0.06
|
|
$
|
1.62
|
|
$
|
(5.96)
|
|
|
|
(1)
|
Consisted of items
associated with legal matters, expenses associated with natural
disasters and transaction costs associated with strategic
initiatives.
|
|
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
impact
|
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
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)
|
Consisted of expenses
associated with legal matters, transaction costs associated with
strategic initiatives and other expenses.
|
NEWS MEDIA CONTACT:
Sears Holdings Public Relations
(847) 286-8371
View original
content:http://www.prnewswire.com/news-releases/sears-holdings-reports-third-quarter-2017-results-300564032.html
SOURCE Sears Holdings Corporation