Amazon (AMZN) Comes to Aid of Sears Holdings Corp (NASDAQ:SHLD)

Sears Holdings Corp (NASDAQ:SHLD)

Struggling Sears Holdings Corp (NASDAQ:SHLD) shares popped today after the iconic retailer announced that its Kenmore appliance line will be available through Amazon.com. The market responded to the news by sending SHLD shares gapping up to open at $10.41 from their $9.78 close on Wednesday. Volumes have been heavy – around 10 times their normal 30-day, daily average.

Sears Holdings Corp (NASDAQ:SHLD)
30-day daily $SHLD Candle Bar Graph

Sears was once the most recognized retail store in America but that luster has lost its shine. Other retailers, such as WalMart and Target, surpassed Sears and never really looked back. However as recently as 201, SHLD shares traded above $80. The slide in share price from those levels over the past few years was due to the loss of sales to other brick and mortar retailers and online websites.

Sales topped $39 billion in 2013, but by 2016 the number shrank to $25 billion. In response, Sears Holdings Corp (NASDAQ:SHLD) cut expenses and sold off assets. That helped some accounting ratios, and gave needed financial relief, but sacrificed potential future market share. SHLD now trades under $10. In

In June, Sears Holdings Corp (NASDAQ:SHLD) traded between $6 and $7. Since then, SHLD shares have traded up over 35% for the past month. However, a sizeable short-selling position of around 20% of the share’s float is still betting on the company hitting headwinds that will send the stock lower.

The Amazon deal could pump new revenues, and life, into Sears Holdings Corp (NASDAQ:SHLD). Charlie Kindel, Director of Alexa Smart Home stated “We’re excited that Kenmore has added Alexa functionality to these products and we think customers will love the convenience of cooling their home, starting their laundry, and more, using only their voice. Working with Amazon is perfectly aligned with our omni-channel strategy to unleash the power and service of Kenmore and support the brand’s growth,” said Tom Park, President of Kenmore, Craftsman and DieHard brands at Sears Holdings. “This collaboration is the first of its kind for Kenmore, broadening its accessibility to the next generation of American families outside of Sears branded retail channels.”

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $SHLD and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Sears Holdings Corp (NASDAQ:SHLD)

Sears Holdings Corp (NASDAQ:SHLD) Rallies On Q1 Profit Even As Sales Decline

Sears Holdings Corp (NASDAQ:SHLD)

Sears Holdings Corp (NASDAQ:SHLD) was a big market mover after posting its first profit since 2015, helping fuel optimism about the impact of an ongoing turnaround effort. For the first three months of the year, the retailer says it generated a net income of $244 million compared to a net loss of $471 million a year earlier.

Cost Cuts Impact

Net profit in the first quarter comes on the heels of a cost-cutting push that has seen Sears Holdings Corp (NASDAQ:SHLD) spin off some assets as it sought to raise cash to stay afloat. However, the fact that the company’s core Kmart department stores continue to struggle, remains a point of concern for investors.

“During the first quarter, we took decisive actions to reduce our cost base and drive operational efficiencies which allowed us to make significant progress on our restructuring program. We also remained focused on increasing our financial flexibility and creating value from our asset base to ensure we continue to meet our financial obligations and fund our transformation,” said chief executive officer, Rob Riecker.

Sales & Cash Decline

Revenues in the first quarter totaled $4.3 billion compared to revenues of $5.4 billion reported a year earlier. The company has attributed the decline to fewer Kmart and Sears Full-line stores in operation compared to last year.

Comparable store sales declined by 11.2%, Sears Holdings Corp (NASDAQ:SHLD) having experienced a decline in sales in its grocery, household, pharmacy, apparel, and home categories. The same led to a decline in gross margin that dropped by $247 million compared to last year.

Selling and administrative expenses decreased $236 million in the quarter compared to last year – a drop that the company attributes to improves operational efficiency and reduced costs.

Sears Holdings Corp (NASDAQ:SHLD) market rally came as investors took note of Lambert’s turnaround plan that seems to paying off. However, with a shrinking store base and less advertising the company remains in a precarious position as it tries to return to its glory years.

The company’s cash balance dropping to $264 million from $286 million as of the end of 2016 is also a point of concern. While the company still boasts $3.7 billion in total liquidity, some investors are already starting to question the company’s financial health given the rate at which it is burning cash.

Sears Holdings Corp (NASDAQ:SHLD) stock was up by 13.52% in Thursday’s trading session, ending the day at $8.48 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Is It A Red Start For Sears Holdings Corp (NASDAQ:SHLD)?

Sears Holdings Corp (NASDAQ:SHLD)

Sears Holdings Corp (NASDAQ:SHLD) closed almost 12% lower after the company’s CFO Jason Hollar attempted to alleviate investor concerns by soft-pedaling the language in its 10-K filing on substantial “going-concern” doubt. Hollar stated that the use of the new language was intended to follow regulatory standards.

Deloitte made no note of the going concern matter in its yearly report audit opinion, but the CFO provided the somewhat circular statement that its independent auditors offered the firm with an unqualified audit opinion, which the CFO then stated indicates the company remains a going concern.

Debtwire legal expert Joshua Friedman postulates that the new language could be an indication that CEO Eddie Lampert, who has put cash into Sears Holdings from his ESL Investments hedge fund and has some of the firm’s unsecured debt, could be prepared to turn off the monetary spigot.

The update

Another year has passed by and Sears Holdings Corp (NASDAQ:SHLD) tries to captivate investors.

The company obtained proceeds of $105 million from the asset sale of three properties this month. The company obtained gross proceeds of $72.5 million earlier in January from a sale-leaseback deal for 5 Sears Full-line stores and 2 Sears Auto Centers and they obtained additional gross proceeds of $105 million in February from the sale of 3 Sears full-line stores, two leased and one owned, which they will continue to manage as Sears sites for a period of up to 1 year.

In the press release it was noted that Sears Holdings Corp (NASDAQ:SHLD) recorded $105 million of proceeds in February 2017 by selling 3 assets. The question arises, are these two transactions the same? If yes, then one of the months is wrong? It could be that there are two different transactions, the terms coincidentally happen to be the same. There remains some confusion which as of now needs to be sorted out before taking out any call on Sears.

In the last trading session, the stock price of Sears Holdings Corp (NASDAQ:SHLD) declined more than 12% to close the session at $7.98. The decline came at a share volume 4.14 million compared to average share volume of 1.98 million.

3/22/2017
Ticker Symbol SHLD
Last Price a/o 3:21 PM EST $7.98
Average Volume 1.93M
Market Cap (mlns)  $854.18M
Shares Outstanding (mlns) 107.04M
Share Float (mlns) 70.84M
Inside Ownership 30.00%
Short Float 25.39%
Short Interest Ratio 9.33
Quarterly Return -20.44%
YTD Return -14.10%
Year Return -46.12%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Will Abercrombie & Fitch Co. (NYSE:ANF) Follow Macy’s, JC Penny, and Sears?

Abercrombie & Fitch Co. (NYSE:ANF)

Abercrombie & Fitch Co. (NYSE:ANF) shares are up over 13% on news of unexpected positive performance from the company’s value-line Hollister brand. Also contributing is news that the youth-oriented retail clothing chain will attempt to improve productivity by shuttering 60 stores. News that its online sales increased 28% also contributed to a belief that better financial performance is on the horizon.

Overall, for the year, Abercrombie & Fitch Co. (NYSE:ANF) posted net sales of $3.326 billion versus last year’s figure of $3.518 billion. Gross profit also dropped from $1.361 billion last year to $2.028 billion. Net income per share also dropped from last year $0.52/share versus $0.06/share. While the Abercrombie brand posted a -13% in comparable sales, the Hollister brand achieved a positive 1% increase in comparable sales. For the quarter, ANF reported earnings of $0.71/share on $1.04 billion in revenues which was lower than analyst estimates of $0.75/share on $1.05 billion.

Some analysts see some silver linings in today’s financial earnings release. International sales declined by only 4%, compared to the third quarter drop of 10%. Additionally, half of the company’s 700+ domestic leases are up for renewal by the end of FY 2018. This will give management additional flexibility to pursue productivity increases while not absorbing extraordinary expenses that might be involved with buying out existing leases.

Fran Horowitz, Chief Executive Officer, said:

Results for the quarter reflect a still challenging and competitive retail environment, however we continue to make progress on our strategic priorities. Hollister, our largest brand, achieved positive comp sales and the Abercrombie brand renewal continues, although it is a work in progress. International markets improved measurably from last quarter, for both Abercrombie and Hollister brands, and the direct-to-consumer business continued to deliver positive comparable sales in both the U.S. and international markets. However, the competitive environment resulted in more promotional activity and a lower gross margin rate than planned.

Retail experts have noted that the financial health and action plan for Abercrombie & Fitch Co. (NYSE:ANF) is not unlike what is being observed at Macy’s (NYSE:M), JC Penny’s (NYSE:JCP), or Sears (NASDAQ:SHLD).

3/2/2017
Ticker Symbol ANF
Last Price a/o 11:34 AM EST  $                    13.15
Average Volume                3,320,000
Market Cap (mlns)  $                  794.63
Sales (mlns) $3,400.00
Shares Outstanding (mlns) 67.98
Share Float (mlns) 67.16
Shortable Yes
Optionable Yes
Inside Ownership 0.20%
Short Float 29.05%
Short Interest Ratio 5.88
Quarterly Return -18.48%
YTD Return -0.93%
Year Return -57.77%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy. 

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance.

What Caused J C Penney Company Inc (NYSE:JCP) Shares To Drop 5.8%

J C Penny Inc (NYSE:JCP)

J C Penny Inc (NYSE:JCP) on Friday became the latest major retail brand to highlight the struggles of retailers. The company reported mixed results for the December quarter, or 4Q2016, and joined the chorus of retail footprint cutting. J C Penney said it will close at least 130 stores in the coming months and send 6,000 workers on early retirement. Those measures are expected to help the company prune costs and achieve more agility, but many investors have decided to distance themselves from the stock as seen the share price movement.

Shares of J C Penney pulled back more than 5.8% to close at $6.46 on Friday. The stock is down more than 22% year-to-date and has declined more than 32% over the last one year.

Investor worries over tough business environment for legacy retailers may have caused shares of J C Penney to tank.

Mixed quarterly earnings

J C Penney Company Inc (NYSE:JCP) generated revenue of $3.96 billion in 4Q2016, missing the consensus estimate of $3.98 billion. Revenue in the year-ago period was $4 billion. Sales at stores that remained opened for at least a year were down 0.7%, steeper than 0.3% decline that analysts expected on the average.

However, adjusted EPS of $0.64 in the latest quarter increased sharply from $0.39 a year ago and easily beat consensus estimate for $0.61.

Weak sales in the women’s category and continued competitive pressure from online retailers hurt J C Penney’s performance in the latest quarter.

Early retirement for workers

J C Penney Company Inc (NYSE:JCP) intends to buy out 6,000 workers as part of the measures to lower its payroll expenses. However, positions left by workers who choose to retire early will be filled by employees affected by the planned store closure. Perhaps that is a way to calm fears over massive job loss at a time when the Trump administration has focused on job creation as one of its signature agendas.

Amazon.com, Inc. (NASDAQ:AMZN), the disruptive online retailer that has caused problems for J C Penney and other legacy retailers, has pledged to add more than 100,000 full-time jobs over the next one and a half years.

Store closure

J C Penney is closing between 130 and 140 stores. The store restructuring is expected to save the company $200 million in annual expenses. However, the restructuring will initially cost $225 million.

In announcing store closure, J C Penney Company Inc (NYSE:JCP) has joined the ranks of Macy’s Inc (NYSE:M), Sears Holdings Corp (NASDAQ:SHLD) and other legacy retailers that are eliminating hundreds of jobs.

2/24/2017
Ticker Symbol JCP
Last Price a/o, 4:02PM EST  $                       6.46
Average Volume (mlns) 19.44
Market Cap (blns)  $                  2.11
Sales (blns) $12.58
Shares Outstanding (mlns) 327.38
Share Float (mlns) 303.26
Shortable Yes
Optionable Yes
Inside Ownership 1.00%
Short Float 23.29%
Short Interest Ratio 3.63
Quarterly Return -33.54%
YTD Return -22.26%
Year Return -22.73%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.