Why Sears' Shares Fell Off a Cliff

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of struggling retailer Sears (Nasdaq: SHLD  ) fell 18% today, after a terrible earnings report.

So what: Revenue fell 6%, to $8.86 billion, and the company reported an adjusted loss of $1.99 per share. Management tried to put a positive spin on some of the numbers, pointing to a 20% jump in online sales and improving apparel and appliance sales, but the bottom line is that Sears is really struggling.

Now what: The experiment that is a Sears and Kmart combo is falling apart before our eyes. A retailer's worst nightmare is falling sales and, on a company level, I don't see a lot of bright spots. This stock has a "Do Not Touch" sign on it and, unless there's an unforeseen turnaround, I don't see that changing any time soon.

Interested in more info on Sears? Add it to your watchlist by clicking here.


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  • Report this Comment On November 16, 2012, at 6:46 PM, Wiseinvestors wrote:

    What about ESL/Lampert and Fairholme collectively basically owning the company/will they be able to extract value for shareholders through either asset sales like the recent spinoffs or a buyout premium or ultimately just extract value for themselves and leave the common shareholder out?

  • Report this Comment On November 16, 2012, at 7:10 PM, leaderoftheback wrote:

    Eddie already has his money out...and he spun off the "good" part of the company and kept half interest in that, too. Simple arithmetic. Lampert does not care about other shareholders. Only one winner in SHLD. I don't understand why anybody would give this guy money. (yeah, I'm still grumpy about losing all my money on the old kmart).

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