Sears Holdings Sees Vast Fourth Quarter Earnings Upswing
Kmart buoys with solid December results
By James Mammarella -- Home Textiles Today, 1/11/2010 12:00:00 AM
Hoffman Estates, Ill. —
Encouraged by strong December comparable store sales by its Kmart division, Sears Holdings last week revised its fourth quarter earnings outlook upwards from previous guidance -- to more than double last year’s results.
With monthly comps dropping 4.3% at the U.S. Sears chain -- and down 8.8% year to date -- it is the downstairs merchants at Kmart that are now shouldering the weight. Kmart’s year-to-date comp decline of 0.7% may look anemic, but the discounter’s fourth quarter-to-date comps are up 2.6% thanks to the strong showing in December: a comp gain of 5.3%.
Overall, the company eked out a comp gain of 0.4% for the five-week retail month ended Jan. 2.
“Kmart’s December comparable store sales benefited from increases in the toys, home and apparel categories,” the company said, “as well as the impact of assuming the operations of its footwear business from a third party effective January 2009.”
Sears Holdings said it now projects Q4 net income of $385 million to $465 million, “or between $3.36 and $4.06 per diluted share.” The company reported net income of $190 million, or $1.55 eps, in the year-ago fourth quarter.
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