Shares of Sears Holdings (Nasdaq: SHLD) have soared just shy of 10% today on enthusiasm after it was announced that the company plans to execute a partial spinoff of its Canadian arm to better focus on its core domestic market, and that the company swung to a first-quarter profit.

The $189 profit works out to $1.78 per share and contrasts with the company's losing record of late, including the $1.58 loss it recorded at this time last year. The profit stems from gains related to massive asset sales, including many stores -- which is why if you exclude on-time items, the company actually reported a loss of $0.31 per share. That’s far better than the year earlier, but it's a loss nevertheless.

One of the reasons I'm less than excited by this performance is Sears' track record for capital allocation. Eddie Lampert is known for pouring his company's money into share repurchases instead of store upkeep or improving operations. So while it's all well and good that Sears is bringing in the bacon, it had to shed assets to do it, and that's a one-time fix. The company's reputation doesn't exactly inspire confidence that it'll responsibly use that money, either.

Making matters worse is that, as I see it, this company has historically shed many of the wrong assets. Lampert has said frequently in the past that the future of Sears is in smaller-format stores. He's not alone in this revelation, as fellow retailers Target (NYSE: TGT), Wal-Mart, and Best Buy (NYSE: BBY) have all made strides toward smaller, more urban, and higher-sales-per-square-foot locations.

Yet Sears Holdings zigged when it should have zagged: It spun off its smaller Orchard Supply Hardware (NYSE: OSH) chain and planned a split of its smaller-format Sears Hometown Stores. Now, in an industry and macro environment when brands mean more than ever, the company is apparently shopping around their Land's End brand. So even though Sears is raising capital, I'm not a fan of either how it's doing it or how it's using its cash.

I'm not alone, either. Sears has become the model of poor performance in the retail sector. Another ailing retailer, J.C. Penney (NYSE: JCP), is starting to be called "the new Sears," and it's definitely not a compliment. Investors would do well to take a step back and look at what's behind Sears' reported gain today and whether they have faith that it'll use this cash pile responsibly -- because history has shown us otherwise.

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