Sears Canada Acknowledges Sears Holdings Report on Fourth Quarter Outlook

Sears Canada Acknowledges Sears Holdings Report on Fourth Quarter Outlook 
TORONTO, Jan. 7, 2013 /CNW/ - Sears Canada Inc. (TSX: SCC) acknowledges the 
release today by Sears Holdings Corporation (NASDAQ: SHLD) of its outlook for 
the fourth quarter of 2012. The release refers to financial information 
related to Sears Canada's projected fourth quarter, 2012 performance. The 
text of the Sears Holdings release, which includes financial information 
prepared under United States Generally Accepted Accounting Principles (U.S. 
GAAP) and presented in U.S. dollars, is set out below. Sears Canada expects 
to release its unaudited fourth quarter earnings, which will include financial 
information prepared under International Financial Reporting Standards (IFRS), 
on February 27, 2013. 
This release contains information which is forward-looking and is subject to 
important risks and uncertainties. Forward-looking information concerns the 
Company's future financial performance, business strategy, plans, goals and 
objectives. Factors which could cause actual results to differ materially 
from current expectations include, but are not limited to: the ability of the 
Company to successfully implement its cost reduction, productivity improvement 
and strategic initiatives and whether such initiatives will yield the expected 
benefits; the results achieved pursuant to the Company's long-term marketing 
and servicing alliance with JPMorgan Chase Bank, N.A.; general economic 
conditions; competitive conditions in the businesses in which the Company 
participates; changes in consumer spending; seasonal weather patterns; 
customer preference toward product offerings; changes in the Company's 
relationship with its suppliers; interest rate fluctuations and other changes 
in funding costs; fluctuations in foreign currency exchange rates; the 
possibility of negative investment returns in the Company's pension plan; 
the outcome of pending legal proceedings; and changes in laws, rules and 
regulations applicable to the Company. While the Company believes that its 
forecasts and assumptions are reasonable, results or events predicted in this 
forward-looking information may differ materially from actual results or 
events. 
The financial outlook set out below is preliminary and therefore subject to 
change. In addition, there can be no assurance that U.S. GAAP and IFRS will 
not differ, and such differences could be material. Accordingly, the outlook 
should be read with caution. 
The following is the text of the Sears Holdings release: 
NEWS MEDIA CONTACT:
Sears Holdings Public Relations
(847) 286-8371 
FOR IMMEDIATE RELEASE: January 7, 2013 
SEARS HOLDINGS PROVIDES UPDATE 
HOFFMAN ESTATES, IL - Sears Holdings Corporation ("Holdings," "we," "us," 
"our," or the "Company") (Nasdaq: SHLD) today is providing an update on our 
quarter-to-date performance, financial position and progress against our 
strategic priorities as we continue our transformation to an integrated 
retailer. 
Comparable store sales for the nine-week ("QTD") and year-to-date ("YTD") 
periods ended December 29, 2012 for its Sears Domestic and Kmart stores are as 
follows: 


                                     QTD        YTD  
                    Sears Domestic     0.5%   -1.6% 
                    Kmart             -3.8%   -3.7% 
                    Total             -1.8%   -2.6% 

Total domestic comparable store sales for the nine-week period declined 1.8% 
largely due to sales declines in the consumer electronics category at both 
Sears and Kmart. Excluding the consumer electronics category, total 
comparable stores sales decreased 0.2%, with Sears Domestic increasing 2.4% 
and Kmart decreasing 2.4%.

Sears Domestic generated a quarter-to-date comparable store sales increase 
despite the decline in consumer electronics. The improvement at Sears 
Domestic was driven by the apparel and appliance categories. The apparel 
category is on track for six consecutive quarters of comparable store sales 
increases. Kmart's quarter-to-date comparable store sales decline reflects a 
significant decline in consumer electronics, as well as declines in the 
pharmacy, grocery & household and drug categories. The decline in pharmacy 
reflects the conversion of brand name drugs to equivalent generic drugs.

Sears Domestic and Kmart online sales increased approximately 20% with the 
largest growth occurring in multi-channel transactions (buy online, pick-up in 
store and order in store, ship to home) which now make up approximately half 
of our online business.

We currently expect Adjusted EBITDA, which excludes certain significant items 
as set forth below, for the fourth quarter will be between $365 million and 
$465 million as compared to $351 million last year ($254 million domestically 
and $97 million in Sears Canada) which is computed as follows:

millions                                                   Range

•  expected net loss attributable to        $(280)        $(360)
Holdings' shareholders

•  plus domestic pension settlements           492           492
and expense not included in Adjusted EBITDA

•  plus income statement line items            153           333
not included in EBITDA consisting of
noncontrolling
interest income, income taxes, interest
expense, interest and investment income,
other
income, depreciation expense and gain on
sales of assets through January 6, 2013

Adjusted EBITDA                                     $365          $465

All of the improvement is expected in our domestic segments as we expect that 
Sears Canada fourth quarter Adjusted EBITDA will be approximately half of last 
year's amount. For the full year, Adjusted EBITDA is expected to be between 
$560 million and $660 million as compared to $277 million last year ($176 
million domestically and $101 million in Sears Canada).

The EBITDA decline for Sears Canada was due primarily to a decline in 
electronics, as well as the impacts of unseasonably warm temperatures in most 
parts of Canada. Same store sales for the nine-week period ended December 29, 
2012 were -5.8%.

"We expect to generate domestic EBITDA improvement for the fourth consecutive 
quarter, and have reduced net debt by $400 million as of December 29, 2012," 
said Lou D'Ambrosio. "We have also made considerable progress on our strategic 
priorities of transforming the Company around Integrated Retail and our 
ShopYourWay membership program."

We currently expect our reported net loss attributable to Holdings' 
shareholders for the quarter ending February 2, 2013 will be between $280 
million and $360 million, or between $2.64 and $3.40 loss per diluted share. 
This includes an estimated non-cash charge of approximately $450 million 
related to pension settlements from our voluntary offer to term-vested 
employees and $42 million of pension expense. Adjusted for these items, net 
income is expected to be between $132 million and $212 million, or between 
$1.25 and $2.00 per diluted share. The range excludes the potential impact, 
if any, related to store closings and impairment charges and restructuring 
activities including severance. In the fourth quarter of the prior year, the 
Company reported a net loss attributable to Holdings' shareholders of $2.4 
billion, or $22.63 loss per diluted share which included a non-cash impairment 
charge of $551 million, a non-cash charge of $1.7 billion relating to a 
valuation allowance against our deferred tax assets and other adjustments 
which can be found in our 8-K filed on February 23, 2012. Adjusted for these 
items, net income was $58 million, or $0.54 per diluted share.

For the full year ending February 2, 2013, the Company expects our reported 
net loss attributable to Holdings' shareholders will be between $721 million 
and $801 million, or between $6.80 and $7.56 loss per diluted share, which 
includes the estimated fourth quarter non-cash charge of approximately $492 
million related to pension settlements and expense, as well as the 
year-to-date adjustments found in our 10-Q filed on November 16, 2012 and 
excludes the potential fourth quarter impact, if any, related to store 
closings and impairment charges and restructuring activities including 
severance. Adjusted for these items, net loss is expected to be between $123 
million and $203 million, or between $1.16 and $1.92 loss per diluted share. 
For the full year ended January 28, 2012, the Company reported a net loss 
attributable to Holdings' shareholders of $3.1 billion, or $29.40 loss per 
diluted share which included a non-cash impairment charge of $551 million, a 
non-cash charge of $1.7 billion relating to a valuation allowance against our 
deferred tax assets and other adjustments which can be found in our 8-K filed 
on February 23, 2012. Adjusted for these items, net loss was $482 million, or 
$4.52 loss per diluted share.

As of December 29, 2012 we reduced our net debt by more than $400 million from 
the same period last year as debt declined from $2.6 billion to $2.4 billion 
and cash increased from $0.9 billion to $1.1 billion. There were no 
borrowings outstanding on our domestic and Canadian revolving credit 
facilities at the end of December, although we expect to end the fiscal year 
with about the same level of domestic revolver borrowings as last year, which 
was $838 million.

"During 2012, we believe that we demonstrated our financial flexibility by 
generating $1.8 billion of proceeds as part of our on-going asset 
re-configuration where we are redeploying our capital in support of our 
member-centric, integrated retail strategy. This strategy also has the 
benefit of relying less upon traditional real estate and inventory assets," 
said Robert Schriesheim, Chief Financial Officer. Looking toward 2013, we 
expect to continue our asset re-configuration and to generate liquidity 
through the following actions:
    --  As we previously announced, we expect to generate at least $500
        million of additional liquidity over the next twelve months.
    --  We currently expect to reduce 2013 peak domestic inventory by
        $500 million from the 2012 level of $8.6 billion at the end of
        the third quarter as a result of stores already or expected to
        be closed, initiatives underway to reduce slow-moving inventory
        and modest productivity improvement.  This action is expected
        to generate $300 million of cash after consideration of related
        payables.
    --  Further reduce our fixed cost base by another $200 million.

In addition, we will continue to carefully evaluate store performance going 
forward and act opportunistically to recognize value from poor performing 
stores as circumstances allow.

During the fourth quarter through January 6, 2013, we have not repurchased any 
of our common shares under our share repurchase program. We have remaining 
authorization to repurchase $504 million of common shares under the previously 
approved programs.

Fourth Quarter Earnings Release

The company currently plans to release financial results for its fiscal 2012 
fourth quarter and full year on or about February 28, 2013, before the market 
opens.

Forward-Looking Statements

Results are preliminary and unaudited. This press release contains 
forward-looking statements about our expectations for the fourth quarter of 
fiscal 2012. Forward-looking statements contained in this press release also 
include statements about various initiatives to reduce expenses, adjust our 
asset base, generate cash and transform our business model and the impact of 
such initiatives. Forward-looking statements are subject to risks and 
uncertainties that may cause our actual results, performance or achievements 
to be materially different from any future results, performance or 
achievements expressed or implied by these forward-looking statements. Such 
statements are based upon the current beliefs and expectations of our 
management and are subject to significant risks and uncertainties. The 
following factors, among others, could cause actual results to differ from 
those set forth in the forward-looking statements: our ability to offer 
merchandise and services that our customers want, including our proprietary 
brand products; our ability to successfully implement various initiatives, 
including reducing expenses, successfully closing stores, improving inventory 
management and other capabilities; customer acceptance of our more 
member-centric, integrated retail model; competitive conditions in the retail 
and related services industries; worldwide economic conditions and business 
uncertainty, including the availability of consumer and commercial credit, 
changes in consumer confidence, tastes, preferences and spending, the impact 
of rising fuel prices, and changes in vendor relationships, including the 
impact of increases in the cost of raw materials experienced by certain of our 
vendors, vendors' lack of willingness to provide acceptable payment terms or 
otherwise restricting financing to purchase inventory or services; the impact 
of seasonal buying patterns, including seasonal fluctuations due to weather 
conditions, which are difficult to forecast with certainty; our dependence on 
sources outside the United States for significant amounts of our merchandise; 
our extensive reliance on computer systems to process transactions, summarize 
results and manage our business, which may be subject to disruptions or 
security breaches; our reliance on third parties to provide us with services 
in connection with the administration of certain aspects of our business; 
impairment charges for goodwill and intangible assets or fixed-asset 
impairment for long-lived assets ; our ability to attract, motivate and retain 
key executives and other associates; our ability to protect or preserve the 
image of our brands; the outcome of pending and/or future legal proceedings, 
including product liability claims and proceedings with respect to which the 
parties have reached a preliminary settlement; and the timing and amount of 
required pension plan funding and other risks, uncertainties and factors 
discussed in our most recent Annual Report on Form 10-K and other filings with 
the Securities and Exchange Commission. We intend the forward-looking 
statements to speak only as of the time made and do not undertake to update or 
revise them as more information becomes available.

About Sears Holdings Corporation

Sears Holdings Corporation is a leading integrated retailer with over 2,600 
full-line and specialty retail stores in the United States and Canada and the 
home of SHOP YOUR WAY, a social shopping experience where members have the 
ability to earn points and receive benefits across a wide variety of physical 
and digital formats through ShopYourWay.com. Sears Holdings is the leading 
home appliance retailer as well as a leader in tools, lawn and garden, fitness 
equipment and automotive repair and maintenance. Key proprietary brands 
include Kenmore, Craftsman and DieHard, with a broad apparel offering, 
including such well-known labels as Lands' End, the Kardashian Kollection, 
Jaclyn Smith and Joe Boxer, as well as Sofia by Sofia Vergara and The Country 
Living Home Collection.  We are the nation's largest provider of home 
services, with more than 15 million service and installation calls made 
annually and have a long-established commitment to those who serve in the 
military through initiatives like the Heroes at Home program. We have been 
named the 2011 Mobile Retailer of the Year, Recipient of the 2012 ENERGY 
STAR® "Corporate Commitment Award" for Product Retailing and Energy 
Management and one of the Top 20 Best Places to Work for Recent Grads. Sears 
Holdings Corporation operates through its subsidiaries, including Sears, 
Roebuck and Co. and Kmart Corporation. For more information, visit Sears 
Holdings' website at www.searsholdings.com. Twitter: @searsholdings | 
|Facebook: http://www.facebook.com/SHCCareers

This is the conclusion of the text of the Sears Holdings release.

Sears Canada is a multi-channel retailer with a network that includes 195 
corporate stores, 269 hometown dealer stores, 8 home services showrooms, over 
1,500 catalogue and online merchandise pick-up locations, 102 Sears Travel 
offices and a nationwide home maintenance, repair, and installation network. 
The Company also publishes Canada's most extensive general merchandise 
catalogue and offers shopping online at www.sears.ca.



Media Relations Contact:

Vincent Power Sears Canada Inc. 416-941-4422 vpower@sears.ca

SOURCE: Sears Canada Inc.

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CO: Sears Canada Inc.
ST: Ontario
NI: RET EST ERN 

-0- Jan/08/2013 01:31 GMT


 
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