Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Sizing up Sears

After record low mortgage rates in June and record home sales in July, what would you expect from August? Strong sales of home appliances, naturally. That was the news today from Sears (NYSE: S  ) , which reported that home appliance sales were tracking stronger than expected so far this month.

This is particularly good news for Sears considering that around 60% of its sales come from the home appliance category. In addition, Sears may finally break its ugly streak of 23 straight months of negative same-store sales. Earlier this month, the company called for flat same-store sales for August, but today's news signals better-than-expected comps.

Sears, the grandpa of retailers, was all but left for dead earlier this year, but has undergone a remarkable turnaround over the past few months. The big news came last month when the company sold its $29 billion credit card portfolio to Citigroup (NYSE: C  ) . That left Sears as a pure-play retail operation, with cash sufficient to pay off all its outstanding debt.

Now, a month later, the 870-store chain is proving it can effectively compete with other "white goods" retailers, including Best Buy (NYSE: BBY  ) , Home Depot (NYSE: HD  ) , and Lowe's (NYSE: LOW  ) . This transition hasn't escaped Wall Street's notice, of course, as shares have risen more than 100% since bottoming below $20 in March.

Sears stands as a case study of how a divestiture of a non-core business can unlock hidden value in a company. For investors who saw Sears' potential earlier this year, hats off to you. For those taking a new look at the stock today, now's probably a better time to wait and watch how Sears' progress plays out from here.

Sears may be the grandpa of retailers, but The Motley Fool is celebrating its 10th anniversary this month with10 Ways to Make More Money Now!

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 499027, ~/Articles/ArticleHandler.aspx, 10/22/2016 6:01:24 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 20 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:03 PM
BBY $39.46 Down -0.02 -0.05%
Best Buy CAPS Rating: *
C $49.57 Down -0.01 -0.02%
Citigroup CAPS Rating: ***
HD $126.60 Up +0.35 +0.28%
Home Depot CAPS Rating: ****
LOW $70.65 Up +0.76 +1.09%
Lowe's CAPS Rating: ****
S $6.55 Down -0.17 -2.53%
Sprint CAPS Rating: **