Earnings Roundup: Sears posts lackluster retail results
Sears Holdings Corp. posted its lowest profit in nearly two years Thursday after another round of weak sales at Kmart and Sears stores sent the retailer’s net income tumbling 40 percent.
Led by hedge fund wizard Ed Lampert, Sears has seen much of its recent financial success boosted by investment income. But after months of curtailing expenses, the company continues to be vexed by falling sales and profit margins.
Net income for the period ended Aug. 4 fell to $176 million, or $1.17 per share, from $294 million, or $1.88 per share, a year earlier, when the company was helped by a one-time gain. Revenue dipped 4 percent to $12.24 billion.Thursday’s results are the latest in a series of lackluster news from Sears, which has seen its stock price fall about 25 percent in the past four months.
Many investors regard Sears as a hedge fund masquerading as a retailer with Lampert, who acquired Kmart in 2003 and Sears, Roebuck and Co. in 2005, at the helm. The company invests in foreign currency contracts as well as complex credit derivatives, which are popular among hedge funds.
“Jewelry retailers Tiffany & Co. and Zale Corp. said Thursday they made money this summer, but their quarterly sales performance suggested the luxury end of the market is stronger than the vast middle.
Zale, which operates middlebrow chains such as Zales Jewelers and Gordon’s Jewelers, saw its same-store sales fall 0.5 percent.
But at high-end Tiffany, sales at stores open at least a year – one of the most closely watched indicators in retailing – jumped 17 percent in the United States and 13 percent overall from a year ago.
Industry experts said Zale’s middle-class shoppers were feeling pinched by high energy prices and slumping housing markets.
“Dell Inc. said Thursday that preliminary second-quarter earnings jumped 46 percent on stronger sales of enterprise products and services, improved average selling prices and favorable component costs.
The computer maker said it earned $733 million, or 32 cents per share, in the three months ended Aug. 3, compared with $502 million, or 22 cents per share, a year ago. Sales rose 4 percent to $14.8 billion.
The report comes as Round Rock, Texas-based Dell emerges from a yearlong internal investigation into accounting misconduct.
Dell still faces shareholder lawsuits, and federal prosecutors in New York have also subpoenaed documents on the company’s financial reporting since 2002.
The positive earnings come after a rough year for Dell.
It began last August with a massive notebook battery recall and continued with the accounting probe. Then came a shake up of the company’s top executive ranks, the loss of its No. 1 position in the PC market to rival Hewlett-Packard Co., thousands of layoffs and, more recently, production delays for its new line of colorful laptops.
“Brown-Forman Corp. reported Thursday that its profit edged up in its fiscal first quarter on a robust spike in international liquor sales. But the maker of Jack Daniel’s Tennessee Whiskey and Southern Comfort said economic worries may be watering down U.S. sales.
For the three months ended July 31, Brown-Forman earned $95.4 million, or 77 cents per share, up from $94.6 million, or 76 cents a share, in the year-ago period.
Quarterly revenues before excise taxes rose 17 percent to $739.1 million from $633.4 million a year ago.
The results included a 4 cent per share gain from favorable foreign currency fluctuations and a 4 cent per share gain from changes in global trade inventory. That was partly offset by a 5 cent per share charge due to the acquisition of Casa Herradura premium tequilas and Chambord, a French liqueur.