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Sears Holdings Goes Negative

By Seth Jayson – Updated Apr 10, 2017 at 1:12PM

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Just the facts, Fool.

Sears Holdings (Nasdaq: SHLD) reported earnings on May 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended May 4 (Q1), Sears Holdings met expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped. Non-GAAP loss per share expanded. GAAP earnings per share dropped to a loss.

Margins contracted across the board.

Revenue details
Sears Holdings reported revenue of $8.45 billion. The two analysts polled by S&P Capital IQ looked for a top line of $8.37 billion on the same basis. GAAP reported sales were 8.8% lower than the prior-year quarter's $9.27 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at -$1.29. The three earnings estimates compiled by S&P Capital IQ predicted -$0.60 per share. Non-GAAP EPS were -$1.29 for Q1 versus -$0.31 per share for the prior-year quarter. GAAP EPS were -$2.63 for Q1 against $1.78 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 25.5%, 220 basis points worse than the prior-year quarter. Operating margin was -3.0%, 250 basis points worse than the prior-year quarter. Net margin was -3.3%, 530 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $8.74 billion. On the bottom line, the average EPS estimate is -$0.67.

Next year's average estimate for revenue is $36.45 billion. The average EPS estimate is -$2.43.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 1,476 members out of 2,317 rating the stock outperform, and 841 members rating it underperform. Among 532 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 331 give Sears Holdings a green thumbs-up, and 201 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Sears Holdings is underperform, with an average price target of $28.33.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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