TORONTO, May 2, 2011 (Canada NewsWire via COMTEX) --
Sears Canada Inc. (TSX: SCC) acknowledges the
release today by Sears Holdings Corporation (NASDAQ: SHLD) of its
outlook for the first quarter of 2011. The release refers to financial
information related to Sears Canada's projected first quarter, 2011
performance. The text of the Sears Holdings release, which includes
financial information prepared under United States Generally Accepted
Accounting Principles (U.S. GAAP) and presented in U.S. dollars, is set
out below. Sears Canada expects to release its unaudited first quarter
earnings, which will include financial information prepared under
International Financial Reporting Standards (IFRS), on May 17, 2011.
This release contains information which is forward-looking and is
subject to important risks and uncertainties. Forward-looking
information concerns the Company's future financial performance,
business strategy, plans, goals and objectives. Factors which could
cause actual results to differ materially from current expectations
include, but are not limited to: the ability of the Company to
successfully implement its cost reduction, productivity improvement and
strategic initiatives and whether such initiatives will yield the
expected benefits; the results achieved pursuant to the Company's
long-term marketing and servicing alliance with JPMorgan Chase Bank,
N.A.; general economic conditions; competitive conditions in the
businesses in which the Company participates; changes in consumer
spending; seasonal weather patterns; customer preference toward product
offerings; changes in the Company's relationship with its suppliers;
interest rate fluctuations and other changes in funding costs;
fluctuations in foreign currency exchange rates; the possibility of
negative investment returns in the Company's pension plan; the outcome
of pending legal proceedings; and changes in laws, rules and
regulations applicable to the Company. While the Company believes that
its forecasts and assumptions are reasonable, results or events
predicted in this forward-looking information may differ materially
from actual results or events.
The financial outlook set out below is preliminary and therefore subject
to change. In addition, there can be no assurance that U.S. GAAP and
IFRS will not differ, and such differences could be material.
Accordingly, the outlook should be read with caution.
The following is the text of the Sears Holdings release:
NEWS MEDIA CONTACT:
Sears Holdings Public Relations
FOR IMMEDIATE RELEASE:
May 2, 2011
SEARS HOLDINGS ANNOUNCES FIRST QUARTER OUTLOOK AND INCREASED SHARE
HOFFMAN ESTATES, IL - In advance of its annual meeting of shareholders
to be held May 3, 2011, Sears Holdings Corporation ("Holdings," "we,"
"us," "our," or the "Company") (Nasdaq: SHLD) today announced domestic
comparable store sales for the first fiscal quarter ended April 30,
2011 for its Kmart and Sears stores as follows:
April 30, 2011
Sears Domestic -5.2%
Our domestic comparable store sales decrease was primarily driven by
appliances, apparel and consumer electronics. Appliances, which had
the most notable decline, benefited in the prior year from the Cash for Appliances rebate programs in the quarter. Apparel experienced slow spring/summer
sales due in part to worse weather than the prior year. Sears' home,
sporting goods, jewelry and footwear categories continued to generate
comparable store sales growth during the quarter.
Beginning with the first quarter of 2011, we now include internet sales
from sears.com and kmart.com shipped direct to customers in comparable
store sales. This change resulted in a positive benefit of
approximately 50 basis points to total domestic comparable store sales
for the quarter. We continue to invest in our multi-channel
capabilities to take advantage of sales as they convert from
traditional sources to the internet. During the quarter, our internet
sales on sears.com and kmart.com shipped directly to customers (as
opposed to picked-up in store) increased 22.4%.
Sears Canada expects to report a comparable store sales decline of 9.2%
for the quarter.
We currently expect a net loss attributable to Holdings' shareholders
for the first quarter ended April 30, 2011 of between $145 million and
$195 million, or between $1.35 and $1.81 per diluted share. In the
first quarter of fiscal 2010, we reported net income attributable to
Holdings' shareholders of $16 million, or $0.14 per diluted share.
We currently expect to end the first quarter with approximately $9.8
billion in merchandise inventories (domestic of $8.9 billion and $0.9
billion at Sears Canada).
The Company expects to report total Adjusted EBITDA of $25 million to
$105 million in the first quarter (domestic of $50 million to $100
million and Sears Canada of $(25) million to $5 million), which is
computed as follows:
-- expected net loss attributable to Holdings' shareholders of
$145 million to $195 million;
-- plus income statement line items not included in EBITDA
consisting of income attributable to noncontrolling interest,
income taxes, other income (loss), interest and investment
income, interest expense, depreciation and amortization expense
and gains on sales of assets of $149 million to $279 million;
-- plus domestic pension expense and closed store / severance
costs not included in Adjusted EBITDA of $21 million.
In the first quarter of 2010, we reported Adjusted EBITDA of $304
million (domestic of $257 million and Sears Canada of $47 million).
For further discussion of the reconciling items, see the Company's
press release on fourth quarter and full year 2010 results issued on
February 24, 2011.
Share Repurchase Activity
During the first quarter, we have repurchased 1.2 million of our common
shares at a total cost of $101 million, an average price of $81.61 per
share, under our share repurchase program. At April 30, 2011, we had
$86 million of remaining authorization under our common share
The Company also announced today that its Board of Directors has
approved the repurchase of up to an additional $500 million of the
Company's common shares. This authorization is in addition to the $86
million worth of shares that remain available for repurchase under the
Company's existing repurchase program. The shares are expected to be
purchased in the open market or in privately negotiated transactions.
Timing will be dependent on prevailing market conditions, alternative
uses of capital and other factors. The Company has repurchased
approximately 56.9 million of the Company's common shares at a total
cost of $5.9 billion since the third quarter of fiscal 2005, when
Holdings' repurchase plan was first approved.
As previously announced, we expect to release first quarter results on
or about May 19, 2011.
Results are preliminary and unaudited. This press release contains
forward-looking statements about our expectations for the first quarter
of fiscal 2011. Forward-looking statements are subject to risks and
uncertainties 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. Such statements are based upon the current
beliefs and expectations of our management and are subject to
significant risks and uncertainties. The following factors, among
others, could cause actual results to differ from those set forth in
the forward-looking statements: our ability to offer merchandise and
services that our customers want, including our proprietary brand
products; our ability to successfully implement initiatives to improve
inventory management and other capabilities; competitive conditions in
the retail and related services industries; worldwide economic
conditions and business uncertainty, the availability of consumer and
commercial credit, changes in consumer confidence, tastes, preferences
and spending, and changes in vendor relationships; the impact of
seasonal buying patterns, including seasonal fluctuations due to
weather conditions, which are difficult to forecast with certainty; our
dependence on sources outside the United States for significant amounts
of our merchandise; our extensive reliance on computer systems to
process transactions, summarize results and manage our business; our
reliance on third parties to provide us with services in connection
with the administration of certain aspects of our business; impairment
charges for goodwill and intangible assets or fixed-asset impairment
for long-lived assets; our ability to attract, motivate and retain key
executives and other associates; the outcome of pending and/or future
legal proceedings, including product liability claims and proceedings
with respect to which the parties have reached a preliminary
settlement; and the timing and amount of required pension plan funding.
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
About Sears Holdings Corporation
Sears Holdings Corporation is the nation's fourth largest broadline
retailer with over 4,000 full-line and specialty retail stores in the
United States and Canada. Sears Holdings is the leading home appliance
retailer as well as a leader in tools, lawn and garden, consumer
electronics and automotive repair and maintenance. Sears Holdings is
the 2011 ENERGY STAR® Retail Partner of the Year. Key proprietary
brands include Kenmore, Craftsman and DieHard, and a broad apparel
offering, including such well-known labels as Lands' End, Jaclyn Smith
and Joe Boxer, as well as the Apostrophe and Covington brands. It also
has the Country Living collection, which is offered by Sears and
Kmart. We are the nation's largest provider of home services, with
more than 11 million service calls made annually. Sears Holdings
Corporation operates through its subsidiaries, including Sears, Roebuck
and Co. and Kmart Corporation. For more information, visit Sears
Holdings' website at www.searsholdings.com.
* * * * *
This is the conclusion of the text of the Sears Holdings release.
Sears Canada is a multi-channel retailer with a network that includes
196 corporate stores, 268 hometown dealer stores, 33 home improvement
showrooms, over 1,800 catalogue merchandise pick-up locations, 108
Sears Travel offices and a nationwide home maintenance, repair, and
installation network. The Company also publishes Canada's most
extensive general merchandise catalogue and offers shopping online at www.sears.ca.
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SOURCE: Sears Canada Inc.