Sears Holdings Is Doomed Unless Sales Recover
On Thursday, Sears Holdings (NASDAQ: SHLD) released another dreadful quarterly earnings report. Revenue plunged 27.2% to $3.66 billion, driven by a massive number of store closures and a 15.3% comp sales decline.
Sears Holdings stock still rose, as management said it had completed a $1.25 billion cost-cutting initiative ahead of schedule, leading to some modest earnings improvement. However, without a turnaround in its sales performance, Sears has virtually no chance of surviving more than another year or two.
In the first quarter of fiscal 2017, Sears Holdings reported further deterioration in its profitability, due to a double-digit comp sales decline and margin erosion. In response, the company raised its cost-cutting targets. As a result, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improved by $124 million in Q2, although that still left it in negative territory.
Source: Fool.com
