Reuters

(Reuters)

Sears Slumps After Warning of 1Q Red Ink

By Retail FOXBusiness

Shares of Sears Holdings (SHLD) tumbled more than 8% Tuesday morning after the retailer warned of a first-quarter loss amid slumping sales.

Continue Reading Below

Eddie Lampert’s Sears said late Monday it expects to post a first-quarter loss of $1.35 to $1.81 a share. Those losses would badly miss expectations on Wall Street for a profit of 3 cents a share and come after Sears posted a profit of 14 cents a share a year earlier.

Sears chalked up the expected red ink to deteriorating sales of appliances, apparel and consumer electronics. The company sees total same-store sales declining 3.6%, led by a 5.2% drop in Sears domestic same-store sales. Kmart same-store sales are seen falling 1.6%.

“Appliances, which had the most notable decline, benefited in the prior year from the Cash for Appliances rebate programs in the quarter,” Sears said in a statement. “Apparel experienced slow spring/summer sales due in part to worse weather than the prior year.”

Somewhat countering the gloomy forecast, Sears said its board has signed off on a plan to boost its share buyback program by $500 million. The company bought back 1.2 million of its shares at a total cost of $101 million during the first quarter.

More On This...

The stock had been up more than 14% in 2011.

What do you think?

Click the button below to comment on this article.