Sears Holdings reports Q1 & full year results

01 Jun '07

3 min read

Sears Holdings Corporation reported net income of $216 million, or $1.40 per diluted share, for the first quarter ended May 5, 2007, compared with net income of $180 million, or $1.14 per diluted share, for the first quarter ended April 29, 2006. Our quarterly results included the net favorable impact of certain significant items as described in the "Significant Items" section below.

Excluding these items, earnings per diluted share were $1.10 for the first quarter of fiscal 2007, as compared to $1.11 per diluted share for the first quarter of fiscal 2006. For the quarter, improved operating results at Sears Canada and lower expenses at Sears Domestic were offset by reduced operating results at Kmart, where a decline in sales resulted in reduced gross margin dollars.

"In part, our domestic operating results reflect the impact of some of the same challenges being faced by our customers, such as rising energy costs and a slower housing market," said Aylwin Lewis, Sears Holdings' chief executive officer and president. "However, as an organization, we need to overcome these factors by better controlling costs and developing innovative solutions that better meet our customers' needs and allow us to generate a more reasonable level of profitability even in the face of such challenges."

A reconciliation of earnings per share excluding the above-noted significant items (a non-GAAP measure) to GAAP diluted earnings per share is set forth below. In addition,earnings per diluted share for the quarter benefited from lower average diluted shares outstanding during the current year quarter as compared with the first quarter of fiscal 2006.

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