SHLDQ - Sears Holdings Corp

[alertmeipp]

I guess I don't understand why after 9 years of Lampert repeatedly proving he has absolutely no idea how to run a retailer, people continue to think there might be some kind of turnaround on the way and pile into the stock. I get the real estate value argument, but Lampert has no idea what to do with that either.

 

+1

 

No matter what he does its bullish for the thesis. Very similar to the BBRY thread....

 

I think many of us criticize SYW and retail.

[Luke 532]

 

I think many of us criticize SYW and retail.

 

Exactly, I don't know of anybody off the top of my head that is investing in the retail turnaround.  It's an asset play.

[alertmeipp]

 

I think many of us criticize SYW and retail.

 

Exactly, I don't know of anybody off the top of my head that is investing in the retail turnaround.  It's an asset play.

 

 

Well, I won't say it's a pure asset play, all facts point to a downsized but more efficient retail business is part of the plan as well.

 

[Guest wellmont]

Something else that was passed along to me.  If it's already been posted I apologize. 

 

http://blog.searsholdings.com/

 

why would anybody read a word they say? I guess a competitor could read it regularly and do the opposite.

[alertmeipp]

Maybe he is right....?

 

http://blogs.marketwatch.com/behindthestorefront/2014/01/09/as-traffic-slumps-and-teen-oriented-firms-struggle-retailers-have-worst-holiday-season-since-2009/

 

With the exception of a few bright spots, such as Costco Wholesale Corp., the downbeat forecasts for the holiday season have turned out to be a prophecy fulfilled.

 

A slew of retailers across a wide variety of industry segments, including American Eagle Outfitters Inc. AEO , Victoria’s Secret parent L Brands Inc. LB , Pier 1 Imports Inc. PIR , Family Dollar Stores Inc. FDO , Bed Bath & Beyond Inc. BBBY +0.36%  and Hhgregg HGG , have given disappointing forecasts for the quarter after ringing up disappointing holiday-season sales.

 

American Eagle said strong  traffic and sales over the Thanksgiving weekend were not sustained, with results through Christmas week missing internal expectations and forcing the chain to offer profit-eroding discounts.

 

A late surge in shopping in the week ended Dec. 28 also failed to stop industrywide holiday sales from seeing their slowest growth since 2009.

 

L Brands LB , typically an outperformer, missed its December same-store-sales estimate, with a 3% increase at Victoria’s Secret, its largest unit. The company said its margins fell because it, like many retail chains, had had to increase promotions.

 

One of retailers’ big problems during the holiday season was lower traffic, as consumers increasingly used their mobile devices to conduct advance research and figure out exactly where they wanted to go, reducing the average shopping trip  to a 3- or 3½-store excursion from 5 stores in 2007, ShopperTrak founder Bill Martin told MarketWatch.

 

Meanwhile, winter storms and icy weather throughout December also have hurt store traffic and curtailed store hours. The holiday season also was hurt because 2013 had six fewer shopping days between Thanksgiving and Christmas.

 

“A shortened holiday shopping season, coupled with the most promotional retailing environment in five years, sluggish consumer spending, stagnant wage growth, multiple winter storms and a shift toward big ticket durables put intense pressure on retail margins and led to uninspiring holiday sales results,” said Ken Perkins of Retail Metrics.

 

Total December same-store sales rose 3.6%, beating expectations of a 2.6% increase, only after Costco delivered a much-better-than-expected 5% U.S. comparable-store-sales gain, according to Retail Metrics. In contrast to many of its retail counterparts, Costco COST -0.05%  reported a 4% gain in comparable traffic.

 

“The consistency of Costco’s comp growth continues to impress as many other retailers have indicated that economic and competitive pressures have resulted in softer sales performance in the holiday period,” said William Blair analyst Mark Miller. “We believe that both the strength and consistency of Costco’s performance are aided by its relatively low e-commerce risk profile relative to peers.”

 

Another bright spot was Macy’s Inc. M , analysts said. While the company’s fourth-quarter sales update missed expectations slightly, it stuck to its profit outlook and guided toward a stronger 2014. The company has benefited from its tailoring of merchandise to local demand, better training employees on selling skills, and integrating its online and in-store sales.

 

Macy’s shares jumped 7.5%.

 

Rival J.C. Penney JCP -0.79%  saw its shares tumble 10% on Wednesday after its sales update for the first time in four months didn’t include specific numbers.  That raised worries that its actual sales could disappoint. Penney stock rose 4.5% on Thursday after Piper Jaffray upgraded the stock and estimated the struggling retailer’s holiday quarter same-store sales to be up at least 5%.

 

“Macy’s was a positive standout,” said Macquarie analyst Liz Dunn. “We think [Nordstrom] will report in-line results, similar to Macy’s, while we expect Kohl’s KSS to be disappointing, particularly given its Midwest concentration.”

 

Citing record-low temperatures across the country, she added that retailers’ outlook for January is negative.

 

Alongside American Eagle, the teen-oriented chains were among the worst performers, with both Zumiez Inc. ZUMZ  and Buckle Inc. BKE  also reporting December sales shortfalls.

 

“Teen retailers felt the most sales/margin pain this holiday season given less differentiated and more price sensitive category offering and limited benefit from fashion or category trends,” said Citigroup analyst Oliver Chen, adding that American Eagle and Abercrombie & Fitch ANF +13.94%  and its Hollister chain were among the most promotional retailers during the holiday season. “We remained concerned that teen retailers are not going to be able to lower the cadence of promotions in 2014.”

 

In fact, in the midst of “a lot of noise,” including disappointing holiday sales and the rumor of a possible buyout, Aeropostale ARO  has decided that it’s no longer planning to be represented at the well-attended ICR Xchange conference next week, analysts said.

 

Gap GPS , reporting its December sales late Thursday, maintained its full-year forecast even after those monthly sales fell short of expectations, coming in flat. Shares rose in the after hours.

 

– Andria Cheng

[Guest wellmont]

 

I think many of us criticize SYW and retail.

 

Exactly, I don't know of anybody off the top of my head that is investing in the retail turnaround.  It's an asset play.

 

there was actually a guy about two weeks ago on the thread stating his likely scenario is shld retail becoming profitable again.

[krazeenyc]

 

I think many of us criticize SYW and retail.

 

Exactly, I don't know of anybody off the top of my head that is investing in the retail turnaround.  It's an asset play.

 

there was actually a guy about two weeks ago on the thread stating his likely scenario is shld retail becoming profitable again.

 

I believe that is me.... in that scenario SHLD would use less than 30% of the sq ft uses today.

[ourkid8]

I know one, Eddie Lampert...

 

Tks,

S

 

 

I think many of us criticize SYW and retail.

 

Exactly, I don't know of anybody off the top of my head that is investing in the retail turnaround.  It's an asset play.

[Guest wellmont]

 

I think many of us criticize SYW and retail.

 

Exactly, I don't know of anybody off the top of my head that is investing in the retail turnaround.  It's an asset play.

 

there was actually a guy about two weeks ago on the thread stating his likely scenario is shld retail becoming profitable again.

 

I believe that is me.... in that scenario SHLD would use less than 30% of the sq ft uses today.

 

maybe (doubtful imo) but how much money will they lose getting there?

[ERICOPOLY]

“There's no reason to become alarmed, and we hope you'll enjoy the rest of your flight. By the way, is there anyone on board who knows how to fly a plane?”

 

“I haven't seen anything like this since the Anita Bryant concert."

 

[bmichaud]

If Lampert is trying to turn around retail, why would he spin off Lands End? Just to milk it for cash to fund the "turnaround"? This guy has his entire net worth tied up in this thing - how could he possibly run it into the ground? He can't possibly be that touched.

[Guest wellmont]

i think he has plenty of NW outside of this. will be very interested to see if he buys more here.

[stahleyp]

Hey Eric,

 

are you still in this one?

[alertmeipp]

so did they only burn only 50 millions cash? Wasn't cash on hand 1.05 billion last reported?

 

What's the loss coming from? non-cash? Inventories write down or what?

 

 

[alertmeipp]

Hey Eric,

 

are you still in this one?

 

I think he was out long ago.

[ZenaidaMacroura]

so did they only burn only 50 millions cash? Wasn't cash on hand 1.05 billion last reported?

 

What's the loss coming from? non-cash? Inventories write down or what?

Could you cite the last filing with the cash figure?  I imagine some of the cash generated from asset sales to account in the difference as well..

[ERICOPOLY]

Hey Eric,

 

are you still in this one?

 

Yes, but as I mentioned to Cardboard and Muscleman early today, I got out of my common and calls and wrote some 2015 $45 strike puts.  So I'll own the stock at a cost basis of $34 or so.  It will be a 10% position if that assignment happens.

 

I don't want to be in the stock long term, but I'm suckered in by the high volatility.  Seems pretty stupid since I know exactly what is wrong about that.

[heth247]

Is this an asset play or a turnaround play? I would argue it is both. The assets provide margin of safety, which is the time and liquidity for the turnaround. Eddie did see ahead of other retailers the importance of mobile shopping and invested early, and is actively closing physical stores for the transformation.  Like Krazyeenyc, I do believe the retail can be profitable one day, just not knowing when.

[ERICOPOLY]

Hey Eric,

 

are you still in this one?

 

I think he was out long ago.

 

Well... if only I fully learned my lesson the first time. 

[vinod1]

Does anyone know if stores that are closing/liquidating get included in SSS?

 

It says "Comparable store sales", so I assume that exclude the stores sold.

 

From 10-K

 

References to comparable store sales amounts within the following discussion include sales for all stores

operating for a period of at least 12 full months, including remodeled and expanded stores, but excluding store

relocations and stores that have undergone format changes. In addition, comparable store sales amounts include

sales from sears.com and kmart.com shipped directly to customers and have been adjusted for the change in the

unshipped sales reserves recorded at the end of each reporting period.

 

Vinod

 

 

[merkhet]

I'm unclear whether store relocations are the same as store closures.

[alertmeipp]

so did they only burn only 50 millions cash? Wasn't cash on hand 1.05 billion last reported?

 

What's the loss coming from? non-cash? Inventories write down or what?

Could you cite the last filing with the cash figure?  I imagine some of the cash generated from asset sales to account in the difference as well..

 

 

I got 1.05 billion from the latest presentation, but not clear if that include the Sears Canada dividend.

[alertmeipp]

I'm unclear whether store relocations are the same as store closures.

 

It won't make sense it they include closed stores, right?

[krazeenyc]

so did they only burn only 50 millions cash? Wasn't cash on hand 1.05 billion last reported?

 

What's the loss coming from? non-cash? Inventories write down or what?

Could you cite the last filing with the cash figure?  I imagine some of the cash generated from asset sales to account in the difference as well..

 

I got 1.05 billion from the latest presentation, but not clear if that include the Sears Canada dividend.

 

Remember store closing lose a lot of money (GAAP/Inventory/etc). But they are cash flow positive cause everything is basically converted to cash.

 

TOTAL CASH last quarter was $600 million ($220 SCC) and ($380 Domestic).  Now it's $1 billion. ($300 million more coming to Sears Canada on 1/10 - they hedged at 1.05 to USD).

 

Now Sears Canada got 400 CAD for some real estate, then paid a 509 CAD dividend of which 247 USD went to SHLD. So SCC is 104 USD.  (This is assuming 1.05 CAD to USD)

 

so $600+ ($247-$104) = $856 Million.

 

On the Debt side.

Sears had $1 Billion left remaining on their U.S. Revolver and now $1.8 Billion remaining now : +$800 million.

Sears also had $160 million of commercial paper outstanding reduced to $4 million

 

So $956 Million less debt. 

 

So even though it's pretty horrible overall SHLD domestic operations generated $1202 million in cash.

[Buckeye]

so did they only burn only 50 millions cash? Wasn't cash on hand 1.05 billion last reported?

 

What's the loss coming from? non-cash? Inventories write down or what?

Could you cite the last filing with the cash figure?  I imagine some of the cash generated from asset sales to account in the difference as well..

 

I got 1.05 billion from the latest presentation, but not clear if that include the Sears Canada dividend.

 

Hey Alert-

 

From the release:

 

As of January 4, 2014, we had total cash of approximately $1.0 billion and availability under our credit facilities of $2.3 billion ($1.8 billion under our domestic facility and $0.5 billion under our Sears Canada facility, prior to taking into consideration possible reserves) and $6 million in commercial paper outstanding, with commercial paper capacity of $500 million. The cash balance does not include $300 million Canadian in proceeds from the Sears Canada real estate transactions announced on November 11, 2013, which are expected to be received January 10, 2014.

 

So tomorrow they announce the 300 million?