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| 8-K - 8-K - SEARS HOLDINGS CORP | shcform8-kxq32017earningsr.htm |
Exhibit 99.1
NEWS MEDIA CONTACT:
Sears Holdings Public Relations
(847) 286-8371
FOR IMMEDIATE RELEASE:
November 30, 2017
SEARS HOLDINGS REPORTS THIRD QUARTER 2017 RESULTS
HOFFMAN ESTATES, Ill. - Sears Holdings Corporation ("Holdings," "we," "us," "our," or the "Company") (NASDAQ: SHLD) today announced financial results for its third quarter ended October 28, 2017. As a supplement to this announcement, a presentation, pre-recorded conference and audio webcast are available at our website http://searsholdings.com/invest.
In summary, we reported a net loss attributable to Holdings' shareholders of $558 million ($5.19 loss per diluted share) for the third quarter of 2017 compared to a net loss of $748 million ($6.99 loss per diluted share) for the third quarter of 2016, an improvement of $190 million. Adjusted EBITDA improved $100 million to $(275) million in the third quarter of 2017, from $(375) million in the prior year third quarter. This marks the second consecutive quarter of at least $100 million improvement in Adjusted EBITDA as the restructuring actions taken in the first three quarters of 2017 have resulted in meaningful year-over-year improvement in the Company's performance.
We generated total revenues of approximately $3.7 billion during the third quarter of 2017, compared with revenues of $5.0 billion in the prior year quarter, with store closures contributing to over half of the decline. Revenues were also negatively impacted by reductions in the number of pharmacies in open Kmart stores, as well as the reduction in consumer electronics assortments in both our Kmart and Sears stores. Total comparable store sales declined 15.3% during the quarter. Kmart comparable store sales decreased 13.0%, while Sears comparable store sales declined 17.0%.
Edward S. Lampert, Chairman and Chief Executive Officer of Holdings, said, "In the third quarter, we continued to narrow our losses and delivered another quarter of Adjusted EBITDA improvement of at least $100 million. With the challenging retail landscape continuing to pressure sales, the improvement in Adjusted EBITDA is reflective of the success of the strategic priorities we outlined earlier this year to streamline our operations, reduce inventory and minimize operating expenses, as well as our commitment to our goal of restoring positive Adjusted EBITDA in 2018. Our Shop Your Way membership program and Integrated Retail Strategy remain a key focus for us in order to meet the needs of our members and provide our members with the best experience possible throughout the holiday shopping season."
As we look ahead to the fourth quarter and beyond with a focus on continued improved performance, we intend to:
• | Continue to develop new ways to leverage the Shop Your Way platform in order to invest marketing dollars at the member level to optimize returns and improve comparable store sales trends and associated profitability; |
• | Diversify revenue streams through third party partnerships in several of our businesses including Sears Home Services, Innovel, Kenmore and DieHard; |
• | Further build on the momentum around our dedicated concept stores similar to the recently opened Sears Appliances and Mattress stores in Camp Hill, Pennsylvania and Honolulu, Hawaii; and |
• | Maintain extreme cost discipline focus in light of continued headwinds across the retail sector. |
Rob Riecker, Chief Financial Officer of Holdings, said, "The recently announced agreement with the Pension Benefit Guaranty Corporation requires an initial upfront payment to the pension plans which will be secured by 138 properties released to the Company. Once complete, the estimated contributions of $550 million to the pension plans
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in 2018 and 2019 is eliminated (with the exception of a $20 million payment in July of 2018). Additionally we will be taking action in the near term with respect to certain upcoming debt maturities to provide the Company with further financial flexibility and enhanced liquidity."
Adjusted EBITDA
In addition to our net loss attributable to Holdings' shareholders determined in accordance with Generally Accepted Accounting Principles ("GAAP"), for purposes of evaluating operating performance, we use Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") and Adjusted Loss Per Share ("Adjusted EPS"), which are non-GAAP measures. The tables attached to this press release provide a reconciliation of GAAP to as adjusted amounts. We believe that our use of Adjusted EBITDA and Adjusted EPS provides an appropriate measure for investors to use in assessing our performance across periods, given that these measures provide adjustments for certain significant items which may vary significantly from period to period, thereby improving the comparability of year-to-year results and being more representative of our ongoing performance. Therefore, we have adjusted our results for significant items to make our statements more useful and comparable. However, we do not, and do not recommend that you, solely use Adjusted EBITDA or Adjusted EPS to assess our financial and earnings performance. We also use, and recommend that you use, diluted loss per share in addition to Adjusted EPS in assessing our earnings performance.
As a result of the Seritage and JV transactions, Adjusted EBITDA for the third quarter of 2017 and 2016 included additional rent expense of approximately $40 million and $48 million, respectively. Due to the structure of the leases, we expect that our cash rent obligations to Seritage and the joint venture partners will decline, over time, as space in these stores is recaptured. From the inception of the Seritage transaction to date, we have received recapture notices on 38 properties and also exercised our right to terminate the lease on 56 properties.
Forward-Looking Statements
Results are unaudited. This press release contains forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about our strategic restructuring program and anticipated results of strategic initiatives, our transformation through our integrated retail strategy, our plans to redeploy and reconfigure our assets, our plans to market and sell a portion of our existing real estate assets, our liquidity, our ability to exercise financial flexibility as we meet our obligations and pursue possible strategic transactions, and other statements that describe the Company's plans. Whenever used, words such as "will," "expect," and other terms of similar meaning are intended to identify such forward-looking statements. Forward-looking statements, including these, are based on the current beliefs and expectations of our management and are subject to significant risks, assumptions and uncertainties, many of which are beyond the Company's control, that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Detailed descriptions of other risks relating to Sears Holdings are discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. While we believe that our forecasts and assumptions are reasonable, we caution that actual results may differ materially. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available, except as required by law.
About Sears Holdings Corporation
Sears Holdings Corporation (NASDAQ: SHLD) is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve our members - wherever, whenever and however they want to shop. Sears Holdings is home to Shop Your Way®, a social shopping platform offering members rewards for shopping at Sears and Kmart, as well as with other retail partners across categories important to them. The Company operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation, with full-line and specialty retail stores across the United States. For more information, visit www.searsholdings.com.
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Sears Holdings Corporation | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(Unaudited) | |||||||||||||||
Amounts are Preliminary and Subject to Change | |||||||||||||||
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||
millions, except per share data | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | |||||||||||
REVENUES | |||||||||||||||
Merchandise sales | $ | 2,893 | $ | 4,061 | $ | 9,820 | $ | 13,111 | |||||||
Services and other | 767 | 968 | 2,506 | 2,975 | |||||||||||
Total revenues | 3,660 | 5,029 | 12,326 | 16,086 | |||||||||||
COSTS AND EXPENSES | |||||||||||||||
Cost of sales, buying and occupancy - merchandise sales | 2,535 | 3,497 | 8,320 | 10,928 | |||||||||||
Gross margin dollars - merchandise sales | 358 | 564 | 1,500 | 2,183 | |||||||||||
Gross margin rate - merchandise sales | 12.4 | % | 13.9 | % | 15.3 | % | 16.7 | % | |||||||
Cost of sales and occupancy - services and other | 423 | 570 | 1,403 | 1,759 | |||||||||||
Gross margin dollars - services and other | 344 | 398 | 1,103 | 1,216 | |||||||||||
Gross margin rate - services and other | 44.9 | % | 41.1 | % | 44.0 | % | 40.9 | % | |||||||
Total cost of sales, buying and occupancy | 2,958 | 4,067 | 9,723 | 12,687 | |||||||||||
Total gross margin dollars | 702 | 962 | 2,603 | 3,399 | |||||||||||
Total gross margin rate | 19.2 | % | 19.1 | % | 21.1 | % | 21.1 | % | |||||||
Selling and administrative | 1,339 | 1,543 | 3,975 | 4,530 | |||||||||||
Selling and administrative expense as a percentage of total revenues | 36.6 | % | 30.7 | % | 32.2 | % | 28.2 | % | |||||||
Depreciation and amortization | 89 | 91 | 259 | 278 | |||||||||||
Impairment charges | 9 | 3 | 29 | 18 | |||||||||||
Gain on sales of assets | (316 | ) | (51 | ) | (1,437 | ) | (166 | ) | |||||||
Total costs and expenses | 4,079 | 5,653 | 12,549 | 17,347 | |||||||||||
Operating loss | (419 | ) | (624 | ) | (223 | ) | (1,261 | ) | |||||||
Interest expense | (136 | ) | (105 | ) | (387 | ) | (289 | ) | |||||||
Interest and investment loss | — | (8 | ) | (14 | ) | (25 | ) | ||||||||
Loss before income taxes | (555 | ) | (737 | ) | (624 | ) | (1,575 | ) | |||||||
Income tax (expense) benefit | (3 | ) | (11 | ) | 59 | (39 | ) | ||||||||
NET LOSS ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | $ | (558 | ) | $ | (748 | ) | $ | (565 | ) | $ | (1,614 | ) | |||
NET LOSS PER COMMON SHARE ATTRIBUTABLE TO HOLDINGS' SHAREHOLDERS | |||||||||||||||
Diluted loss per share | $ | (5.19 | ) | $ | (6.99 | ) | $ | (5.27 | ) | $ | (15.10 | ) | |||
Diluted weighted average common shares outstanding | 107.5 | 107.0 | 107.3 | 106.9 | |||||||||||
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Sears Holdings Corporation | ||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||
(Unaudited) | ||||||||||||
Amounts are Preliminary and Subject to Change | ||||||||||||
millions | October 28, 2017 | October 29, 2016 | January 28, 2017 | |||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 200 | $ | 258 | $ | 286 | ||||||
Restricted cash | 154 | — | — | |||||||||
Accounts receivable | 378 | 372 | 466 | |||||||||
Merchandise inventories | 3,452 | 5,032 | 3,959 | |||||||||
Prepaid expenses and other current assets | 347 | 304 | 285 | |||||||||
Total current assets | 4,531 | 5,966 | 4,996 | |||||||||
Property and equipment (net of accumulated depreciation and amortization of $2,451, $2,886 and $2,841) | 1,855 | 2,392 | 2,240 | |||||||||
Goodwill | 269 | 269 | 269 | |||||||||
Trade names and other intangible assets | 1,244 | 1,904 | 1,521 | |||||||||
Other assets | 294 | 334 | 336 | |||||||||
TOTAL ASSETS | $ | 8,193 | $ | 10,865 | $ | 9,362 | ||||||
LIABILITIES | ||||||||||||
Current liabilities | ||||||||||||
Short-term borrowings | $ | 1,061 | $ | 618 | $ | — | ||||||
Current portion of long-term debt and capitalized lease obligations | 1,310 | 594 | 590 | |||||||||
Merchandise payables | 772 | 1,556 | 1,048 | |||||||||
Other current liabilities | 1,534 | 1,848 | 1,956 | |||||||||
Unearned revenues | 676 | 759 | 748 | |||||||||
Other taxes | 290 | 355 | 339 | |||||||||
Total current liabilities | 5,643 | 5,730 | 4,681 | |||||||||
Long-term debt and capitalized lease obligations | 2,032 | 3,087 | 3,573 | |||||||||
Pension and postretirement benefits | 1,641 | 1,997 | 1,750 | |||||||||
Deferred gain on sale-leaseback | 446 | 656 | 563 | |||||||||
Sale-leaseback financing obligation | 247 | 164 | 235 | |||||||||
Other long-term liabilities | 1,557 | 1,716 | 1,641 | |||||||||
Long-term deferred tax liabilities | 634 | 890 | 743 | |||||||||
Total Liabilities | 12,200 | 14,240 | 13,186 | |||||||||
DEFICIT | ||||||||||||
Total Deficit | (4,007 | ) | (3,375 | ) | (3,824 | ) | ||||||
TOTAL LIABILITIES AND DEFICIT | $ | 8,193 | $ | 10,865 | $ | 9,362 | ||||||
Total common shares outstanding | 107.6 | 107.0 | 107.1 | |||||||||
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Sears Holdings Corporation | |||||||||||
Segment Results | |||||||||||
(Unaudited) | |||||||||||
Amounts are Preliminary and Subject to Change | |||||||||||
13 Weeks Ended October 28, 2017 | |||||||||||
millions, except store data | Kmart | Sears Domestic | Sears Holdings | ||||||||
Total revenues | $ | 1,175 | $ | 2,485 | $ | 3,660 | |||||
Total cost of sales, buying and occupancy | 986 | 1,972 | 2,958 | ||||||||
Gross margin dollars | 189 | 513 | 702 | ||||||||
Gross margin rate | 16.1 | % | 20.6 | % | 19.2 | % | |||||
Selling and administrative | 377 | 962 | 1,339 | ||||||||
Selling and administrative expense as a percentage of total revenues | 32.1 | % | 38.7 | % | 36.6 | % | |||||
Depreciation and amortization | 19 | 70 | 89 | ||||||||
Impairment charges | 3 | 6 | 9 | ||||||||
Gain on sales of assets | (132 | ) | (184 | ) | (316 | ) | |||||
Total costs and expenses | 1,253 | 2,826 | 4,079 | ||||||||
Operating loss | $ | (78 | ) | $ | (341 | ) | $ | (419 | ) | ||
Number of: | |||||||||||
Kmart Stores | 510 | — | 510 | ||||||||
Full-Line Stores | — | 572 | 572 | ||||||||
Specialty Stores | — | 22 | 22 | ||||||||
Total Stores | 510 | 594 | 1,104 | ||||||||
13 Weeks Ended October 29, 2016 | |||||||||||
millions, except store data | Kmart | Sears Domestic | Sears Holdings | ||||||||
Total revenues | $ | 1,888 | $ | 3,141 | $ | 5,029 | |||||
Total cost of sales, buying and occupancy | 1,605 | 2,462 | 4,067 | ||||||||
Gross margin dollars | 283 | 679 | 962 | ||||||||
Gross margin rate | 15.0 | % | 21.6 | % | 19.1 | % | |||||
Selling and administrative | 555 | 988 | 1,543 | ||||||||
Selling and administrative expense as a percentage of total revenues | 29.4 | % | 31.5 | % | 30.7 | % | |||||
Depreciation and amortization | 17 | 74 | 91 | ||||||||
Impairment charges | 3 | — | 3 | ||||||||
Gain on sales of assets | (30 | ) | (21 | ) | (51 | ) | |||||
Total costs and expenses | 2,150 | 3,503 | 5,653 | ||||||||
Operating loss | $ | (262 | ) | $ | (362 | ) | $ | (624 | ) | ||
Number of: | |||||||||||
Kmart Stores | 801 | — | 801 | ||||||||
Full-Line Stores | — | 676 | 676 | ||||||||
Specialty Stores | — | 26 | 26 | ||||||||
Total Stores | 801 | 702 | 1,503 | ||||||||
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Sears Holdings Corporation | |||||||||||
Segment Results | |||||||||||
(Unaudited) | |||||||||||
Amounts are Preliminary and Subject to Change | |||||||||||
39 Weeks Ended October 28, 2017 | |||||||||||
millions, except store data | Kmart | Sears Domestic | Sears Holdings | ||||||||
Total revenues | $ | 4,143 | $ | 8,183 | $ | 12,326 | |||||
Total cost of sales, buying and occupancy | 3,411 | 6,312 | 9,723 | ||||||||
Gross margin dollars | 732 | 1,871 | 2,603 | ||||||||
Gross margin rate | 17.7 | % | 22.9 | % | 21.1 | % | |||||
Selling and administrative | 1,092 | 2,883 | 3,975 | ||||||||
Selling and administrative expense as a percentage of total revenues | 26.4 | % | 35.2 | % | 32.2 | % | |||||
Depreciation and amortization | 46 | 213 | 259 | ||||||||
Impairment charges | 11 | 18 | 29 | ||||||||
Gain on sales of assets | (808 | ) | (629 | ) | (1,437 | ) | |||||
Total costs and expenses | 3,752 | 8,797 | 12,549 | ||||||||
Operating income (loss) | $ | 391 | $ | (614 | ) | $ | (223 | ) | |||
Number of: | |||||||||||
Kmart Stores | 510 | — | 510 | ||||||||
Full-Line Stores | — | 572 | 572 | ||||||||
Specialty Stores | — | 22 | 22 | ||||||||
Total Stores | 510 | 594 | 1,104 | ||||||||
39 Weeks Ended October 29, 2016 | |||||||||||
millions, except store data | Kmart | Sears Domestic | Sears Holdings | ||||||||
Total revenues | $ | 6,248 | $ | 9,838 | $ | 16,086 | |||||
Total cost of sales, buying and occupancy | 5,100 | 7,587 | 12,687 | ||||||||
Gross margin dollars | 1,148 | 2,251 | 3,399 | ||||||||
Gross margin rate | 18.4 | % | 22.9 | % | 21.1 | % | |||||
Selling and administrative | 1,597 | 2,933 | 4,530 | ||||||||
Selling and administrative expense as a percentage of total revenues | 25.6 | % | 29.8 | % | 28.2 | % | |||||
Depreciation and amortization | 51 | 227 | 278 | ||||||||
Impairment charges | 7 | 11 | 18 | ||||||||
Gain on sales of assets | (120 | ) | (46 | ) | (166 | ) | |||||
Total costs and expenses | 6,635 | 10,712 | 17,347 | ||||||||
Operating loss | $ | (387 | ) | $ | (874 | ) | $ | (1,261 | ) | ||
Number of: | |||||||||||
Kmart Stores | 801 | — | 801 | ||||||||
Full-Line Stores | — | 676 | 676 | ||||||||
Specialty Stores | — | 26 | 26 | ||||||||
Total Stores | 801 | 702 | 1,503 | ||||||||
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Sears Holdings Corporation | |||||||||||||||
Adjusted EBITDA | |||||||||||||||
(Unaudited) | |||||||||||||||
Amounts are Preliminary and Subject to Change | |||||||||||||||
13 Weeks Ended | 39 Weeks Ended | ||||||||||||||
millions | October 28, 2017 | October 29, 2016 | October 28, 2017 | October 29, 2016 | |||||||||||
Net loss attributable to Holdings per statement of operations | $ | (558 | ) | $ | (748 | ) | $ | (565 | ) | $ | (1,614 | ) | |||
Income tax expense (benefit) | 3 | 11 | (59 | ) | 39 | ||||||||||
Interest expense | 136 | 105 | 387 | 289 | |||||||||||
Interest and investment loss | — | 8 | 14 | 25 | |||||||||||
Operating loss | (419 | ) | (624 | ) | (223 | ) | (1,261 | ) | |||||||
Depreciation and amortization | 89 | 91 | 259 | 278 | |||||||||||
Gain on sales of assets | (316 | ) | (51 | ) | (1,437 | ) | (166 | ) | |||||||
Before excluded items | (646 | ) | (584 | ) | (1,401 | ) | (1,149 | ) | |||||||
Closed store reserve and severance | 115 | 113 | 319 | 182 | |||||||||||
Pension expense | 248 | 72 | 539 | 216 | |||||||||||
Other(1) | 18 | 43 | 9 | 52 | |||||||||||
Amortization of deferred Seritage gain | (19 | ) | (22 | ) | (59 | ) | (66 | ) | |||||||
Impairment charges | 9 | 3 | 29 | 18 | |||||||||||
Adjusted EBITDA | $ | (275 | ) | $ | (375 | ) | $ | (564 | ) | $ | (747 | ) | |||
(1) The 13-week period ended October 28, 2017 consisted of expenses associated with natural disasters and transaction costs associated with strategic initiatives, while the 39-week period ended October 28, 2017 consisted of items associated with legal matters, expenses associated with natural disasters and transaction costs associated with strategic initiatives. The 13- and 39- week periods ended October 29, 2016 consisted of expenses associated with legal matters, transaction costs associated with strategic initiatives and other expenses.
.
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Sears Holdings Corporation | |||||||||||||||||||
Adjusted EBITDA | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Amounts are Preliminary and Subject to Change | |||||||||||||||||||
13 Weeks Ended | |||||||||||||||||||
October 28, 2017 | October 29, 2016 | ||||||||||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | Kmart | Sears Domestic | Sears Holdings | |||||||||||||
Operating loss per statement of operations | $ | (78 | ) | $ | (341 | ) | $ | (419 | ) | $ | (262 | ) | $ | (362 | ) | $ | (624 | ) | |
Depreciation and amortization | 19 | 70 | 89 | 17 | 74 | 91 | |||||||||||||
Gain on sales of assets | (132 | ) | (184 | ) | (316 | ) | (30 | ) | (21 | ) | (51 | ) | |||||||
Before excluded items | (191 | ) | (455 | ) | (646 | ) | (275 | ) | (309 | ) | (584 | ) | |||||||
Closed store reserve and severance | 87 | 28 | 115 | 107 | 6 | 113 | |||||||||||||
Pension expense | — | 248 | 248 | — | 72 | 72 | |||||||||||||
Other(1) | 9 | 9 | 18 | — | 43 | 43 | |||||||||||||
Amortization of deferred Seritage gain | (3 | ) | (16 | ) | (19 | ) | (4 | ) | (18 | ) | (22 | ) | |||||||
Impairment charges | 3 | 6 | 9 | 3 | — | 3 | |||||||||||||
Adjusted EBITDA | $ | (95 | ) | $ | (180 | ) | $ | (275 | ) | $ | (169 | ) | $ | (206 | ) | $ | (375 | ) | |
% to revenues | (8.1 | )% | (7.2 | )% | (7.5 | )% | (9.0 | )% | (6.6 | )% | (7.5 | )% | |||||||
39 Weeks Ended | |||||||||||||||||||
October 28, 2017 | October 29, 2016 | ||||||||||||||||||
millions | Kmart | Sears Domestic | Sears Holdings | Kmart | Sears Domestic | Sears Holdings | |||||||||||||
Operating income (loss) per statement of operations | $ | 391 | $ | (614 | ) | $ | (223 | ) | $ | (387 | ) | $ | (874 | ) | $ | (1,261 | ) | ||
Depreciation and amortization | 46 | 213 | 259 | 51 | 227 | 278 | |||||||||||||
Gain on sales of assets | (808 | ) | (629 | ) | (1,437 | ) | (120 | ) | (46 | ) | (166 | ) | |||||||
Before excluded items | (371 | ) | (1,030 | ) | (1,401 | ) | (456 | ) | (693 | ) | (1,149 | ) | |||||||
Closed store reserve and severance | 189 | 130 | 319 | 159 | 23 | 182 | |||||||||||||
Pension expense | — | 539 | 539 | — | 216 | 216 | |||||||||||||
Other(1) | (15 | ) | 24 | 9 | 8 | 44 | 52 | ||||||||||||
Amortization of deferred Seritage gain | (9 | ) | (50 | ) | (59 | ) | (13 | ) | (53 | ) | (66 | ) | |||||||
Impairment charges | 11 | 18 | 29 | 7 | 11 | 18 | |||||||||||||
Adjusted EBITDA | $ | (195 | ) | $ | (369 | ) | $ | (564 | ) | $ | (295 | ) | $ | (452 | ) | $ | (747 | ) | |
% to revenues | (4.7 | )% | (4.5 | )% | (4.6 | )% | (4.7 | )% | (4.6 | )% | (4.6 | )% | |||||||
(1) The 13-week period ended October 28, 2017 consisted of expenses associated with natural disasters and transaction costs associated with strategic initiatives, while the 39-week period ended October 28, 2017 consisted of items associated with legal matters, expenses associated with natural disasters and transaction costs associated with strategic initiatives. The 13- and 39- week periods ended October 29, 2016 consisted of expenses associated with legal matters, transaction costs associated with strategic initiatives and other expenses.
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Sears Holdings Corporation | ||||||||
Adjusted Earnings per Share | ||||||||
(Unaudited) | ||||||||
Amounts are Preliminary and Subject to Change | ||||||||
13 Weeks Ended October 28, 2017 | ||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||
millions, except per share data | GAAP | Pension Expense | Closed Store Reserve, Store Impairments and Severance | Gain on Sales of Assets | Amortization of Deferred Seritage Gain | Other(1) | Tax Matters | As Adjusted | ||||||||||||||||
Gross margin impact | $ | 702 | $ | — | $ | 60 | $ | — | $ | (19 | ) | $ | — | $ | — | $ | 743 | |||||||
Selling and administrative impact | 1,339 | (248 | ) | (55 | ) | — | — | (18 | ) | — | 1,018 | |||||||||||||
Depreciation and amortization impact | 89 | — | (19 | ) | — | — | — | — | 70 | |||||||||||||||
Impairment charges impact | 9 | — | (9 | ) | — | — | — | — | — | |||||||||||||||
Gain on sales of assets impact | (316 | ) | — | — | 290 | — | — | — | (26 | ) | ||||||||||||||
Operating loss impact | (419 | ) | 248 | 143 | (290 | ) | (19 | ) | 18 | — | (319 | ) | ||||||||||||
Income tax expense impact | (3 | ) | (93 | ) | (54 | ) | 109 | 7 | (7 | ) | 212 | 171 | ||||||||||||
After tax impact | (558 | ) | 155 | 89 | (181 | ) | (12 | ) | 11 | 212 | (284 | ) | ||||||||||||
Diluted loss per share impact | $ | (5.19 | ) | $ | 1.44 | $ | 0.83 | $ | (1.68 | ) | $ | (0.11 | ) | $ | 0.10 | $ | 1.97 | $ | (2.64 | ) | ||||
(1) Consisted of expenses associated with natural disasters and transaction costs associated with strategic initiatives.
13 Weeks Ended October 29, 2016 | |||||||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||
millions, except per share data | GAAP | Pension Expense | Closed Store Reserve, Store Impairments and Severance | Gain on Sales of Assets | Mark-to-Market Adjustments | Amortization of Deferred Seritage Gain | Other(1) | Tax Matters | As Adjusted | ||||||||||||||||||
Gross margin impact | $ | 962 | $ | — | $ | 38 | $ | — | $ | — | $ | (22 | ) | $ | — | $ | — | $ | 978 | ||||||||
Selling and administrative impact | 1,543 | (72 | ) | (75 | ) | — | — | — | (43 | ) | — | 1,353 | |||||||||||||||
Depreciation and amortization impact | 91 | — | (2 | ) | — | — | — | — | — | 89 | |||||||||||||||||
Impairment charges impact | 3 | — | (3 | ) | — | — | — | — | — | — | |||||||||||||||||
Gain on sales of assets impact | (51 | ) | — | — | 16 | — | — | — | — | (35 | ) | ||||||||||||||||
Operating loss impact | (624 | ) | 72 | 118 | (16 | ) | — | (22 | ) | 43 | — | (429 | ) | ||||||||||||||
Interest and investment loss impact | (8 | ) | — | — | — | 9 | — | — | — | 1 | |||||||||||||||||
Income tax expense impact | (11 | ) | (27 | ) | (44 | ) | 6 | (3 | ) | 8 | (16 | ) | 287 | 200 | |||||||||||||
After tax impact | (748 | ) | 45 | 74 | (10 | ) | 6 | (14 | ) | 27 | 287 | (333 | ) | ||||||||||||||
Diluted loss per share impact | $ | (6.99 | ) | $ | 0.42 | $ | 0.69 | $ | (0.09 | ) | $ | 0.06 | $ | (0.13 | ) | $ | 0.25 | $ | 2.68 | $ | (3.11 | ) | |||||
(1) Consisted of expenses associated with legal matters, transaction costs associated with strategic initiatives and other expenses.
9
Sears Holdings Corporation | ||||||||
Adjusted Earnings per Share | ||||||||
(Unaudited) | ||||||||
Amounts are Preliminary and Subject to Change | ||||||||
39 Weeks Ended October 28, 2017 | ||||||||||||||||||||||||||||||
Adjustments | ||||||||||||||||||||||||||||||
millions, except per share data | GAAP | Pension Expense | Closed Store Reserve, Store Impairments and Severance | Gain on Sale of Trade name | Gain on Sales of Assets | Mark-to-Market Adjustments | Amortization of Deferred Seritage Gain | Other(1) | Tax Matters | As Adjusted | ||||||||||||||||||||
Gross margin impact | $ | 2,603 | $ | — | $ | 164 | $ | — | $ | — | $ | — | $ | (59 | ) | $ | — | $ | — | $ | 2,708 | |||||||||
Selling and administrative impact | 3,975 | (539 | ) | (155 | ) | — | — | — | — | (9 | ) | — | 3,272 | |||||||||||||||||
Depreciation and amortization impact | 259 | — | (33 | ) | — | — | — | — | — | — | 226 | |||||||||||||||||||
Impairment charges | 29 | — | (29 | ) | — | — | — | — | — | — | — | |||||||||||||||||||
Gain on sales of assets impact | (1,437 | ) | — | — | 492 | 794 | — | — | — | — | (151 | ) | ||||||||||||||||||
Operating loss impact | (223 | ) | 539 | 381 | (492 | ) | (794 | ) | — | (59 | ) | 9 | — | (639 | ) | |||||||||||||||
Interest and investment loss impact | (14 | ) | — | — | — | — | 17 | — | — | — | 3 | |||||||||||||||||||
Income tax benefit impact | 59 | (202 | ) | (143 | ) | 185 | 298 | (6 | ) | 22 | (3 | ) | 174 | 384 | ||||||||||||||||
After tax impact | (565 | ) | 337 | 238 | (307 | ) | (496 | ) | 11 | (37 | ) | 6 | 174 | (639 | ) | |||||||||||||||
Diluted loss per share impact | $ | (5.27 | ) | $ | 3.14 | $ | 2.21 | $ | (2.86 | ) | $ | (4.62 | ) | $ | 0.10 | $ | (0.34 | ) | $ | 0.06 | $ | 1.62 | $ | (5.96 | ) | |||||
(1) Consisted of items associated with legal matters, expenses associated with natural disasters and transaction costs associated with strategic initiatives.
39 Weeks Ended October 29, 2016 | |||||||||||||||||||||||||||
. | Adjustments | ||||||||||||||||||||||||||
millions, except per share data | GAAP | Pension Expense | Closed Store Reserve, Store Impairments and Severance | Gain on Sales of Assets | Mark-to-Market Adjustments | Amortization of Deferred Seritage Gain | Other(1) | Tax Matters | As Adjusted | ||||||||||||||||||
Gross margin impact | $ | 3,399 | $ | — | $ | 102 | $ | — | $ | — | $ | (66 | ) | $ | — | $ | — | $ | 3,435 | ||||||||
Selling and administrative impact | 4,530 | (216 | ) | (80 | ) | — | — | — | (52 | ) | — | 4,182 | |||||||||||||||
Depreciation and amortization impact | 278 | — | (7 | ) | — | — | — | — | — | 271 | |||||||||||||||||
Impairment charges impact | 18 | — | (18 | ) | — | — | — | — | — | — | |||||||||||||||||
Gain on sales of assets impact | (166 | ) | — | — | 63 | — | — | — | — | (103 | ) | ||||||||||||||||
Operating loss impact | (1,261 | ) | 216 | 207 | (63 | ) | — | (66 | ) | 52 | — | (915 | ) | ||||||||||||||
Interest and investment loss impact | (25 | ) | — | — | — | 29 | — | — | — | 4 | |||||||||||||||||
Income tax expense impact | (39 | ) | (81 | ) | (78 | ) | 24 | (11 | ) | 25 | (20 | ) | 630 | 450 | |||||||||||||
After tax impact | (1,614 | ) | 135 | 129 | (39 | ) | 18 | (41 | ) | 32 | 630 | (750 | ) | ||||||||||||||
Diluted loss per share impact | $ | (15.10 | ) | $ | 1.26 | $ | 1.21 | $ | (0.36 | ) | $ | 0.17 | $ | (0.39 | ) | $ | 0.30 | $ | 5.89 | $ | (7.02 | ) | |||||
(1) Consisted of expenses associated with legal matters, transaction costs associated with strategic initiatives and other expenses.
10