Sears Holdings (SHLD) Q1 2017

Rob Riecker – CFO

They are closing unprofitable stores to save costs

“In April, we increased our annualized cost savings target from our ongoing restructuring program to $1.25 billion from $1.0 billion. Based on the significant progress we delivered during the first quarter, including $700 million in annualized cost savings action to date. As part of the program, we completed the previously announced closure of 150 nonprofitable stores and initiated the closure of 92 underperforming pharmacy operations in certain Kmart stores and 50 Sears Auto Center locations.”

They extended maturity of debt

“During the first quarter of 2017, we were able to pay down approximately 418 million of our term loan debt outstanding. And as previously announced, we reached an agreement to extend the maturity of 400 million of our $500 million 2016 secured loan facility from July 2017 to January 2018”

The retail headwinds persisted

“the retail headwinds persisted in the first quarter with continued softness in the store traffic and elevated promotional markdowns due to competition. We reported total revenue of $4.3 billion in the first quarter of 2017, compared to $5.4 billion in the same quarter last year, representing a decrease of $1.1 billion. This was largely driven by having fewer stores in operations, which accounted for $557 million of the sales decline, and declines in our comparable store sales due to industry headwinds I just mentioned, which accounted for $417 million of the decline.”