Sears Holding Corp Leads S&P 500 Gainers On Upbeat Earnings Preview
Sears Holdings Corp was the biggest advancer on the Standard & Poor's 500 index on Tuesday after the retailer issued a preview of first-quarter earnings that easily surpassed analysts' estimates. Sears said it will report an unexpected surge in continuing operations and a much smaller-than-expected slip in sales among stores open a year or more. Shares of the retail giant gained as much as 17 percent on the news, before settling for an intraday gain of 15.4 percent.
Sears has suffered from disappointing sales for years, even before the recession hit, as competitors like Wal-Mart and Target have done a much better job of keeping stores updated and prices down. The company may be drawing the attention of shoppers from JC Penney, who is expected to report a massive decline in sales for the first quarter because of disruptions related to reconfiguring its stores.
Sears said that same-store sales only fell by 1 percent at its namesake department stores and only 1.6 percent at its Kmart discount chain. The company enjoyed gains of better than 10 percent for each of the chains in apparel and footwear, which more than offset weak results in consumer electronics sales. Sears forecast that it would post adjusted profit of $55 to $95 million, or 52 to 80 cents a share, whereas economists in a recent Bloomberg survey were expecting a loss of $1.69 per share.