Please ensure Javascript is enabled for purposes of website accessibility

Why Sears Holdings Corp Stock Fell Today

By Jeremy Bowman - Updated Feb 1, 2018 at 5:47PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the retailer dipped as it cut more jobs and reported a new round of borrowings.

What happened

Shares of Sears Holdings Corp (SHLDQ) slipped again today as the company announced more layoffs and yet another round of loans to help it stay afloat. The stock was down as much as 6.6% during the session, but closed off 3.1% due to a late-session surge.

The exterior of a Sears department store

Image source: Sears Holding.

So what

Yesterday, news broke that Sears was laying off another 220 people at its headquarters as the company looks for more ways to cut costs amid massive losses in its retail business and declining sales. The retailer said the job cuts were part of a restructuring plan that intended to cut $1.25 billion in annual costs. 

Today, the company followed that up by disclosing another $210 million in borrowings over the last month from entities owned by CEO Eddie Lampert. Those loans follow a debt restructuring plan and more borrowings in January. The report seems to indicate that Sears continues to bleed cash, as the company said that comparable sales at both Sears and KMart locations fell by double digits during the holiday season.

Now what

With another round of job cuts and borrowings, this is just more of the same for Sears; the company also announced last month that it would close 103 stores. Today's news seems to be just one more small step toward what looks like the company's inevitable demise as customers are fleeing stores and the company is racking up hundreds of millions of dollars in annual losses.

The largesse of Lampert and his investment fund has kept the company afloat so Sears stores could stay open as long as he's willing to fund them, but the numbers are only likely to get worse since the company failed to take advantage of the best holiday season in years for retailers. Expect a further financial downfall when Sears reports fourth-quarter earnings in March.


Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sears Holdings Corporation Stock Quote
Sears Holdings Corporation

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.