Sears Holdings’ (SHLD) stock price fell 6.6% on March 15, 2018, following the announcement of its fiscal 4Q17 (the quarter that ended on February 3, 2018) results after the market closed on March 14.
Sears’s revenue of $4.4 billion easily beat analysts’ consensus estimate of $3.9 billion, but its bottom line took a beating. The company’s earnings per share of -$1.41 were wider than its adjusted EPS of $1.16 projected by analysts.
On a YTD (year-to-date) basis, the stock has fallen 36.9%. Sears stock has been declining for a long time now. In contrast, Macy’s (M) stock has risen 14.3% to $28.80, while Kohl’s (KSS) stock has risen 13.4% to $61.49 YTD. On the other hand, JCPenney (JCP) has fallen 4.1% to $3.03 on a YTD basis as of March 15, 2018.
The expansion of e-commerce has hurt most traditional retailers. In the case of Sears, apart from online commerce, several self-harming managerial decisions have reduced what was once a retail behemoth to a shadow of its former glory. In 2017, its stock price fell 61.5%.
Sales are falling, and profits continue to be elusive. To turn things around, the company has undertaken a plethora of initiatives, including cost cuts and debt financing. Nonetheless, these moves have yet to achieve the desired results.
Following its fiscal 4Q17 results, Sears was rated as a “sell” by the only analyst covering its stock. Currently, analysts’ 12-month average target price for the company is $2.00, which reflects an 11.5% downside to its stock price as of March 15, 2018.
In this series on Sears’s fiscal 4Q17 results, we’ll discuss the company’s revenue, EPS, and margins in detail.