Sears expects second-quarter earnings drop
Sears Holdings Corp. reported today that second-quarter earnings will likely fall well below Wall Street expectations because of disappointing sales of home appliances and other products at both Sears and its chain of Kmart stores.
Sears expects to post earnings between $160 million and $200 million – or between $1.06 and $1.32 per share – for the quarter ending Aug. 4, executives at the Hoffman Estates, Ill.-based company said. Earlier analyst estimates expected $2.12 per share. Last year, the company’s second quarter income was $294 million.
“We are disappointed with our recent performance,” Chief Executive Aylwin Lewis said in a statement. “Although we believe our business has suffered from many of the same factors that have led other retailers to announce disappointing results and lowered expectations, our recent performance underscores our ongoing need to become more relevant to consumers while improving our discipline around expense management.”
During a nine-week period that ended July 7, same-store sales at Kmart’s U.S. locations fell 3.9 percent while same-store sales fell 4 percent at Sears.
In addition, Sears said it approved the purchase of up to $1 billion of its common shares, in addition to the $121 million worth of shares that remain available for repurchase under the company’s current buyback program. Since late 2005, Sears has repurchased nearly 14 million shares at a total cost of $1.9 billion.
Heidemann points to retail focus at AHMA event
Mundelein, Ill. Helping members was the major theme to emerge from the 2007 American Hardware Manufacturers Association (AHMA) Annual Membership Meeting held here June 27. AHMA president and CEO Tim Farrell described his industry group as one that is engaged in strategies to increase value and sales for its members. Shortly after his presentation, True Value’s president and CEO Lyle Heidemann delivered an update on the Chicago-based hardware cooperative — including its efforts to help True Value members become the best hardware store in their respective towns.
Held at the Ivanhoe Club here outside of Chicago, the meeting also featured Home Improvement Research Institute (HIRI) director Fred Miller. AHMA directors and officers were also confirmed by the members.
Heidemann’s True Value update began with the CEO’s description of the co-op’s mindset from a “turn-around” mode to growth mode. Following accounting problems that led to major defections in 2003, Heidemann pointed to the years 2005 to 2006 as foundation building years. But from 2007 to 2009, “we believe we are now in a position for growth.”
That’s a far cry from the mindset of a turnaround — described by Heidemann as “trying to make decisions good for tomorrow morning, so in fact you’re still in business the next morning.”
Pointing to the differences between the consistent chain-like big-box model and the independent diverse traditional co-op model, he said True Value intends to lay claim to the middle ground between the two. He also described a continuing transformation from a wholesale mindset to a retail mindset.
“The biggest shift we’re trying to make as a company is one word: ‘retail.’ ” The measure that matters, he added, is the day-to-day profitability of the members, not end-of-year net margin for the co-op.
Another message of growth for the good of the membership came from Farrell. He described how the Schaumburg, Ill.-based industry association was engaged in reinventing itself and looking for new ways to be a value to members. The direction is to “acquire capabilities to increase value for AHMA members, increase membership of AHMA and increase revenue of AHMA,” he said.
Also during the meeting, 2007 AHMA chairman Don Dray of Rockford, Ill.-based Dasco Pro was recognized for “exceptional leadership” by past chairman Stuart Bush of Roebic Laboratories in Orange, Conn.
Paul Jannke of RISI to speak at ProDealer Conference
Paul Jannke, senior vp-wood products and timber for RISI, will address the issue of price fluctuation in the lumber market at the 11th annual ProDealer Conference. His session is scheduled for Sept. 20.
An economist who specializes in wood products, Jannke will look ahead at lumber supply and demand based on macroeconomic conditions, end-use markets, costs, capacity expansions and the U.S. Canadian Softwood Lumber Agreement. He will also provide audience members with a two-year forecast for wholesale lumber prices.
RISI is a leading source of information on the forest products industry, covering various markets, prices, corporate moves, regulations, mill projects and downtime. Headquartered outside of Boston, the company has offices in North America, Europe and Asia.
The ProDealer Conference, sponsored by Home Channel News, is scheduled for Sept. 19 to 21 at Loews Coronado Bay Hotel in San Diego, Calif. Networking events will include a deep sea fishing tournament, a night at the Padres game and a City of Hope golf tournament. For more information, visit www.prodealer.com.