Sears Holdings (SHLD) reported fiscal first-quarter earnings on Thursday. The operator of Sears and Kmart stores' results were not as bad as analysts had expected. But the adjusted per-share loss was wider than a year earlier while sales fell rapidly, as the venerable retailer fights to survive in the face of Amazon (AMZN) and fierce competition among brick-and-mortar chains.
Estimates: A per-share loss of $3.05, widening from a year-ago loss of $1.86 per share. Revenue was seen diving 25% to $4.054 billion. (Net income, before excluding a slew items, was a $244 million, the first positive reading in two years and above Sears' forecast, swinging from a loss of $471 million a year earlier.)
Results: Adjusted per-share loss of $2.15. Revenue sank 20% to $4.30 billion. Same-store sales tumbled 11.9%.
Stock: Shares jumped 13.5% to 8.48 on the stock market today, after hitting 9.90 intraday. J.C. Penney (JCP) rallied 0.2% and Kohl's (KSS) 2.5%.
Sears' stock-market downward spiral deepened last week after CEO Eddie Lampert began calling out some of the struggling retailer's vendors in public, accusing one supplier of trying to "embarrass us in the media to force us to let them out of their contract." In March, the company said "substantial doubt" hung over its ability to keep operating.
Lampert's dispute with the supplier, One World, which provided tools for Sears' Craftsman brand, followed more depressing results from Macy's (M) earlier this month, leading to a wide retail sell-off. J.C. Penney's dismal results dragged shares to an all-time low.
IBD'S TAKE: The dire financials out of the retail sector has led to speculation over whether it has any hope left at all. Analysts aren't ready to call retail dead, but they do believe the industry has too many stores.
The narrative for mid-tier retailers like Sears is that they've suffered over the years due to a retreat from shoppers to e-commerce sites like Amazon and discounters like TJX (TJX).
But even TJX's results this month missed expectations, although its push into home goods and optimism against a bleak industry backdrop appeared to assuage investors.
Home-improvement retailer Lowe's (LOW) on Wednesday sank on weak earnings, guidance and April housing data. However, Home Depot (HD) fared better. The stronger housing market during the quarter had meant more business from DIY homeowners and contractors.
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