Sears Holdings said Thursday that same-store sales fell 15.6 percent during the fourth quarter of fiscal 2017, but it also expects new U.S. tax legislation to aid the company in posting a profit.
Same-store sales at Sears locations tumbled 18.1 percent, while those at Kmart stores were down 12.2 percent in the latest period.
The earnings pre-announcement came in conjunction with Sears commencing private exchange offers for its outstanding unsecured notes due in 2019 and secured notes due in 2018, the company said in a filing with the Securities and Exchange Commission.
Sears is calling for revenue of $4.4 billion in the fourth quarter, which includes the holiday season, compared with sales of $6.1 billion a year ago.
Net income for the quarter should be between $140 million and $240 million, Sears said, with the new tax law giving the company a benefit of roughly $445 million to $495 million. Sears lost $607 million during the same period in 2016.
The company also said it will record a noncash impairment charge “related to the Sears trade name” of between $50 million and $100 million. A year ago, that charge was $381 million.
Sears said the ongoing closure of unprofitable stores (under both the Sears and Kmart banners) has “resulted in meaningful improvement” in the department store chain’s overall performance. The company said it’s moving toward a “less asset-intensive business model.”
Shares were up more than 11 percent Thursday afternoon on the news. Sears’ stock has tumbled more than 65 percent from a year ago, recently trading below $2, an all-time low.