Lower Sales at Sears: Fool by Numbers

On May 31, Sears Holdings (Nasdaq: SHLD  ) released earnings for the first quarter ended May 5.

  • Sales declined 2.5% because of lower same-store sales, which were partially offset by sales increases at Lands' End and the company's home services businesses.
  • Earnings per share increased almost 23%, but the company pointed out many one-time-type benefits that helped. Adjusting for those items, EPS fell $0.01 to $1.10.
  • Motley Fool CAPS players give Sears Holdings and Target (NYSE: TGT  ) four-star ratings, but only two stars to Inside Value recommendation Wal-Mart (NYSE: WMT  ) . To see what these ratings mean, come join us in CAPS.

(Figures in millions, except per-share data.)

Income Statement Highlights

Q1 2007

Q1 2006

Change

Sales

$11,702

$11,998

(2.5%)

Net Profit

$216

$180

20.0%

EPS

$1.40

$1.14

22.8%

Diluted Shares

153.9

158.0

(2.6%)

Get back to basics with the income statement.

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin

28.1%

27.8%

0.3

Operating Margin

3.4%

2.8%

0.6

Net Margin

1.8%

1.5%

0.3

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$3,413

$3,182

7.3%

Accounts Rec.

$814

$811

0.4%

Inventory

$10,323

$9,581

7.7%

Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable

$3,536

$3,634

(2.7%)

Long-Term Debt

$2,669

$3,510

(24.0%)

The balance sheet reflects the company's health.

Cash Flow Highlights

We'll have to wait for the 10-Q for the cash flow statement. We don't like waiting.

Free cash flow is a Fool's best friend.

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.


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