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SHLDQ - Sears Holdings Corp

alertmeipp

By alertmeipp
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BTShine Newbie

BTShine

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Is there a way to Itunes or Google Play to determine how many times the Shopyourway app has been downloaded?

 

Not that I know. 

 

But, looking at Google Trends you can see that people are searching for "shop your way" more and more every month.  In the U.S., searches for "shop your way" are running 30% ahead of last month and 60% ahead of February 2013. 

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CorpRaider Newbie

CorpRaider

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probably "pre-recorded" due to poor reception on his sat phone on the yacht :)

 

sorry, i had to go there  ;)

 

I bet it's because he wants to talk about the guarantor and non-guarantor issue in detail and wanted to make sure he wasn't interrupted.

 

Pure gold!  I loves me some eddie on his yacht jokes.  Has anyone ever encountered this before?

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BTShine Newbie

BTShine

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probably "pre-recorded" due to poor reception on his sat phone on the yacht :)

 

sorry, i had to go there  ;)

 

I bet it's because he wants to talk about the guarantor and non-guarantor issue in detail and wanted to make sure he wasn't interrupted.

 

Pure gold!  I loves me some eddie on his yacht jokes.  Has anyone ever encountered this before?

 

Has anyone ever encountered a pre-recorded conference call before? 

 

Berkshire does one every quarter...but, they don't release it to the public :)

 

Jokes aside, I'm sure there's other CCalls done this way.  I'd bet they're scared of being asked questions they don't want to answer (could be they want to hide good news, maybe...maybe they want to hide that SYW is now partnering with Tesla's future battery factory). 

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Luke 532 Newbie

Luke 532

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Short interest now 16,660,138, eclipses previous high of August 2013.  Wow.

http://www.nasdaq.com/symbol/shld/short-interest

 

Short (as of 2/14/2014): 16.660M

Lampert/Berkowitz/Tisch: 79.597M

Outstanding: 106.451M

Float: 26.854M

Horizon/Chou/OldWest/BakerSt/Force/GoodHaven/Fine = ~10.009M

 

Short interest as % of float: 62.0% (assuming zero shares are long-term oriented of those held by Horizon Kinetics, Baker Street, Old West, Chou, and Force Capital)

 

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Luke 532 Newbie

Luke 532

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"Our domestic pension obligation decreased approximately $600 million from $2.1 billion at the end of 2012. The reduction in the unfunded liability was due to favorable return on plan assets and an increased discount rate. Based on the current regulatory environment, we anticipate making contributions of approximately $485 million in 2014."

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peridotcapital Newbie

peridotcapital

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"As previously announced, we are evaluating the separation of our Lands' End business through a spin-off to shareholders and have made filings with the SEC to accomplish this through a pro rata distribution to our shareholders. We are also considering strategic alternatives for our Sears Auto Centers business, subject to board approval and other conditions. We expect that through these actions and through working with the board and management of Sears Canada to increase the value of our investment, which has a current market value of about $620 million, and realize significant cash proceeds, we will raise in excess of $1.0 billion in proceeds to Sears Holdings in 2014, creating value and helping to fund our transformation."

 

After reading the release, letter, and presentation it is clear that Eddie is focused on integrated retail first and foremost. It is also clear that cash proceeds are going to be spent on the retail operations. Between pension contributions, interest expense, and capex, 2014 cash needs are going to be ~$1 billion and that assumes the stores breakeven on a cash basis (they lost >$600M in 2013). Overall cash burn could push $1.5 billion for the year. $500M will come from Lands End and Eddie will have to come up with the rest over the course of the year. I just don't see a catalyst for this stock unless the retail side actually turns in 2014, as Eddie is alluding to in his letter, and shows positive comps and shrinking losses.

 

I think it is possible, but unlikely. In the presentation he notes that SYW points will soon be replacing traditional markdowns as a way to boost gross margins (right now shoppers are getting both). What he seems to be ignoring is the fact that such a move is just a fancy way of raising prices. Given the competitive retail environment right now (which he constantly cites), coupled with the demographics of the core Sears/Kmart shopper, I don't get why he thinks he'll be able to raise prices and not see a corresponding sales decline. Evidently he thinks offering in-vehicle pick-up and things like that will offset the impact. I doubt it.

 

I also find it misleading to imply that most every retailer had a horrible holiday season due to pricing pressures and online disruption. He pretends Sears is leading the way on integrated retail, and that his results are in-linw with the other stores, but his margins and comps are far worse than the competition. These other retailers are using online/mobile too, and they are actually competing better in the current environment than Sears is, despite the insistence that Sears is more focused on it and/or ahead of the other stores in that regard. It just reads as out of touch to me, and until the results he keeps hinting at materialize, I won't be convinced.

 

All of that said, it seems unlikely that the stock will fall below the recent range of 35-45 so any upside progress from here on the operational side should work out very nicely for the bulls.

 

 

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BTShine Newbie

BTShine

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I would buy more based upon this release. 

 

They're clearly monetizing the assets.  They stated they're looking to create more value from real estate.  And, Eddie is saying, or implying, he believes they're going to be profitable based upon what's going on in the company with SYW, etc.

 

Lands' End is seeing solid, and growing, earnings.  With trailing net income of $80 million Lands' End unlevered is worth $1.2 billion (P/E of 15).  Or, when they lever it with $500 million of debt Lands' End's net income will drop to about $65 million (after tax effect of $25 million interest expense reduces net income by $15 million).

 

At net income of $65 million, we see LE trade for around $1 Billion at a 15 P/E multiple.  $1 Billion + $500 million dividend from debt gets us to $1.5 Billion of value from LE.  That's big. 

 

Don't be surprised if we see a private equity group make an offer for Lands' End in excess of $1.5 Billion based upon the recent numbers. 

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BTShine Newbie

BTShine

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same ole same ole. nothing in here that addresses the losses in the retail business.

 

Respectfully disagree.  I hear them saying, based upon their testing and logical rollout of SYW, that they will be able to be profitable once the transformation is complete.  You can say "Eddie has been wrong before," and you'll be right.  So, maybe it's just a matter of if you believe his judgement is more likely to be right than not. 

 

From the call - "We are working in a very focused and diligent manner to drive this

transformation to a member-centric model and achieve improved levels of

profit performance."

 

"We’re becoming a more fact-based company and are making decisions based

on analytical data as opposed to gut feelings"

 

 

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ni-co Newbie

ni-co

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I think it is possible, but unlikely. In the presentation he notes that SYW points will soon be replacing traditional markdowns as a way to boost gross margins (right now shoppers are getting both). What he seems to be ignoring is the fact that such a move is just a fancy way of raising prices. Given the competitive retail environment right now (which he constantly cites), coupled with the demographics of the core Sears/Kmart shopper, I don't get why he thinks he'll be able to raise prices and not see a corresponding sales decline. Evidently he thinks offering in-vehicle pick-up and things like that will offset the impact. I doubt it.

 

I don't think that he plans to raise prices. It's just about the way markdowns are being done technically. If this turnaround works, it will work because he gets costs down ("asset light business model") by closing unnecessary or sizing them down. ESL is fully aware of the fact that the way to compete with AMZN is not renovating your stores and charging higher prices to pay for that.

 

All of that said, it seems unlikely that the stock will fall below the recent range of 35-45 so any upside progress from here on the operational side should work out very nicely for the bulls.

 

One catalyst will be the LE spin-off. I can't see how you can justify a $35 price tag pre LE spin-off. $25 for the rest of SHLD? Come on…

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Guest wellmont

Guest wellmont

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same ole same ole. nothing in here that addresses the losses in the retail business.

 

Respectfully disagree.  I hear them saying, based upon their testing and logical rollout of SYW, that they will be able to be profitable once the transformation is complete.  You can say "Eddie has been wrong before," and you'll be right.  So, maybe it's just a matter of if you believe his judgement is more likely to be right than not. 

 

From the call - "We are working in a very focused and diligent manner to drive this

transformation to a member-centric model and achieve improved levels of

profit performance."

 

"We’re becoming a more fact-based company and are making decisions based

on analytical data as opposed to gut feelings"

 

same stuff he's been saying for years. "transformation". except in 2013 the losses in retail were staggering. in the holiday quarter he barely made any ebitda. and land's end will probably trade closer to 10x than 15. 5 or 6 x ebitda. btw I hope you're right. I would love to become unburied in my shld.

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