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Upcoming AWS Coverage on TJX Companies Post-Earnings Results
LONDON, UK / ACCESSWIRE / February 13, 2017 / Active Wall St. blog coverage looks at the headline from Sears Holdings Corp. (NASDAQ: SHLD) as the company announced, amidst declining revenues and increasing net loss, a strategic restructuring program on February 10, 2017, with the aim to improve liquidity and financial flexibility. The restructuring program designed by its CEO Edward Lampert outlines ways to streamline operations and improve performance by targeting to reduce costs up to $1 billion annually. The restructuring plan was disclosed along with the announcement of the Company's preliminary results for Q4 2016. Register with us now for your free membership and blog access at:
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One of Sears Holdings' competitors within the Department Stores space, The TJX Companies, Inc. (NYSE: TJX), announced on February 08, 2017, that it plans to release its Q4 and full year fiscal 2017 sales and earnings results on Wednesday, February 22, 2017, before 9:30 a.m. ET. AWS will be initiating a research report on TJX Cos. in the coming days.
Today, AWS is promoting its blog coverage on SHLD; touching on TJX. Get all of our free blog coverage and more by clicking on the links below:
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Commenting on the restructuring plan, Edward S. Lampert, Chairman and CEO of Sears Holdings said:
"To build on our positive momentum, today we are initiating a fundamental restructuring of our operations that targets at least $1.0 billion in cost savings on annualized basis, as well as improves our operating performance. To capture these savings, we plan to reduce our corporate overhead, more closely integrate our Sears and Kmart operations and improve our merchandising, supply chain and inventory management."
The restructuring plan
Sears has been burdened by the losses in recent years and has been severely challenged by changing consumer buying patterns and shifting of loyalty towards stores like Walmart Inc., Amazon etc. The Company's recent plans to come out of the problem has not met with much success added to that, the recent shutting of its 150 stores had sparked off rumours of bankruptcy.
The current restructuring plan laid out by Edward Lampert aims to reduce overhead, improve merchandise available at its stores which would be achieved through better inventory management. The targeted $1 billion in annualized savings includes the savings arising out of the Company's decision to shut down 108 Kmart's and 42 Sears' stores.
The plan aims to simplify the organizational structure of the Company as well as increase the consolidation of the support functions. Increase the profitability in its stores and through its online channels. It's new plan aims at integrating and streamlining its pricing, sourcing, supply chain and inventory management functions. The Company plans to use technology and data analytics tools to improve its product offerings at its Sears' and Kmart's stores by identifying the most profitable and popular products and merchandise. Leveraging its real estate portfolio to increase profitability, the plan envisions capitalizing on its real estate assets by selling, sub-leasing, reformatting, or shutting down of stores.
Sears has already enlisted the services of Eastdil Secured to market and sell its real estate approximately valued at $1 billion. Sears is also looking at monetizing its Kenmore, DieHard and Auto-Centers brands by exploring partnerships, joint ventures, and other strategic options. In January 2017, Sears has sold five Sears' full-line stores and two Sears' Auto-Centers for $72.5 million. Sears sold off its Craftsman brand to Stanley Black & Decker in January 2017 for approximately $900 million.
The back story
Sears' preliminary Q4 2016 results of $6.1 billion showed a decline of 16% and its full year revenue for 2016 is expected to be $22.1 billion which is 12% lower than the revenues of the previous year. It expects its Q4 2016 losses of around $650 million which is quite high than the last year's Q4 2015 loss of $580 million. The Company also reported a decline of 10.3% of its sales of which Sears' domestic recorded a 12.3% drop in sales and Kmart reported an 8% drop in sales.
This is the latest in the series of steps taken by Sears since the start of calendar year in January 2017. The steps included obtaining of an additional $ 179 million of loan proceeds, selling of five Sears' full-line stores and two Sears' auto-centers for $72.5 million, plans to shut down 150 stores, which is expected to be completed in the first quarter of 2017 and plans to use to funds from the sale of its Craftsman brand to pay off its debt and pension obligations. Sears plans to pay off $1.5 billion outstanding debt and pension obligations for the fiscal year 2017 by way of funds raised from asset sales, and improved working capital management.
Edward Lampert has earlier brought Kmart out of bankruptcy nearly a decade back in 2003 – 2004. He is the best candidate to steer Sears' future. However, whether the new plan pans out for Sears or not is yet to be seen. The investors seem to like the new path outlined for the Company and their confidence was reflected in the huge surge in the stock's price on Friday, February 10, 2017.
Stock Performance
Investors of Sears were enthused by the announcement of the new of restructuring plan and led to stock prices soaring to 25.63% and close at $6.96 at the closing bell last Friday, February 10, 2017. A total volume of 12.05 million shares were exchanged during the session, which was above the 3-month average volume of 1.46 million shares. The stock currently has a market cap of $592.99 million.
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