SEARS HOLDINGS REPORTS Q2 HOME BUSINESS WEAK; HINTS AT ACQUISITIONS.
HOFFMAN ESTATES, Ill.-Sears Holdings Corp. posted a double-digit earnings gain offset by sales declines at its Sears and Kmart home businesses. The company also said an acquisition could be down the pike in its second-quarter report.
At Sears Domestic, comparable-store sales declines were "more pronounced" in the home fashions and lawn and garden categories, the company said.
For the second quarter ended July 29, Sears Domestic's comp-store sales fell 6.3 percent. Kmart's comp-store sales slipped 0.6 percent, which included declines in home goods at the discount chain. Overall comp-store sales for both chains fell 3.8 percent.
The retailer blamed comp declines on "increased competition and lower transaction volumes."
Although Chairman Edward Lampert has been cutting costs at the combined Sears/Kmart chain to improve margins, sales continue to fall.
Total revenues fell 3 percent to $12.8 billion. Sears' revenues slipped to $8.3 billion from $8.6 billion, while Kmart's sales fell 3.6 percent to $4.8 billion.
By contrast, income soared, fueled in part by lower expenses and synergies gained from the merger of Sears and Kmart, the company said.
Net income rose 83 percent to $294 million, or $1.88 per diluted share, in the year-ago quarter.
Second-quarter results include a $36 million pretax gain, or $22 million net of taxes, which reflects proceeds related to the settlement of a Visa/MasterCard antitrust litigation.
Prior-year second-quarter results include $42 million in costs related to the merger.
Flush with cash, Sears Holdings' second-quarter report said that the company "may pursue investments in the form of acquisitions, joint ventures and partnerships where the company believes attractive returns can be obtained."
In the statement, Lampert said, "Our strong financial position and cash flow generation provide us with the flexibility to capitalize on a wide range of market opportunities as they arise."
Caption(s): The home business at Sears Holdings' Kmart and Sears' chains was weak in the second quarter. / Although Chairman Edward Lampert has been cutting costs at the chain to improve margins, sales continue to fall.
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|Comment:||SEARS HOLDINGS REPORTS Q2 HOME BUSINESS WEAK; HINTS AT ACQUISITIONS.|
|Publication:||HFN The Weekly Newspaper for the Home Furnishing Network|
|Date:||Aug 21, 2006|
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