When Sears Holdings (NASDAQ:SHLDQ) reported its first-quarter 2012 results, it saw a drop in overall sales, a decline in same-store sales, and negative earnings. The company reported that revenue decreased $270 million to $9.3 billion while same-store sales declined by 1.3% -- 1% at Sears and 1.6% at the company's Kmart locations. The company lost $0.31 per share from continuing operations, but offset that by selling $233 million in assets, producing $189 million in profits.

Selling off assets to make up for sales and revenue shortfalls would become standard operating procedure for the chain over the next five years, but in 2012, then-CEO Lou D'Ambrosio probably had no idea that the worst was yet to come. In fact, in the Q1 2012 earnings release he made comments that sound a lot like what current CEO Eddie Lampert says about each quarter now.

We are pleased with the results for the first quarter and our progress toward restoring profit growth and transforming our company. Our actions were driven by a focus on three core priorities: 1. enhancing financial and operational discipline; 2. improving our core retail operations; and 3. leading customer based innovation through integrated retail and an engaging membership program, Shop Your Way Rewards.

Five years later, profit growth remains a distant goal and Shop Your Way has yet to build any sort of meaningful audience. Sears has changed in the past half-decade, but it's closer to a bankruptcy filing than profitability and it's less than half the company it used to be by a number of different measures.

A Sears store

Sears has been closing stores and shedding assets. Image source: Sears.

Where does Sears stand now?

In five years, Sears has gone from $9.3 billion in Q1 sales to $4.3 billion. It has also seen its store count drop by more than half, not counting its now-sold Canada operation. When 2012 began, the company had 1,305 Kmart stores and 867 full-line Sears stores in the U.S.

Five years later, at the close of Q1 2017, the company had just 626 full-line Sears and 624 Kmart locations. It has also sold off its Craftsman brand and countless real estate assets and plans to close 72 more stores by September.

In addition, at the end of Q1 2012, Sears had a cash balance totaling $784 million and inventory of $8.8 billion. Five years later, at the close of Q1 2017, the company had $3.7 billion in debt, a number that's exactly the same as its total liquidity and liquid assets.

In five years, Sears has gone from $9.5 billion in cash and inventory, not to mention now sold-off assets like Craftsman, to a total value of $0. That's a stunning decline made worse by the fact that profitability seems no closer than it did five years ago.

What's next for Sears Holdings?

While Lampert remains optimistic that a turnaround remains possible, Sears' only successes have been in turning its assets into cash. Sales dropped by $1.1 billion year-over-year in Q1, and Sears stores saw a 12.4% decline in same-store sales while Kmart's fell by 11.2%.

There's no reason to believe that any of that will change before Sears runs out of money. The company also runs the risk that its vendors will stop shipping merchandise or demand payment up front, which would effectively put it out of business.

Sears has lots of ways to go bankrupt or be forced to close and few to save itself. The company has put up a mighty struggle, but dwindling assets and sinking sales are a deadly combination that it likely cannot recover from.

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