Sears Holdings Provides Update

                        Sears Holdings Provides Update

PR Newswire

HOFFMAN ESTATES, Ill., Jan. 7, 2013

HOFFMAN ESTATES, Ill., Jan. 7, 2013 /PRNewswire/ -- 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). We expect domestic Adjusted EBITDA of
between $325 million and $395 million. We expect thatSears Canada
fourthquarter Adjusted EBITDA will be approximately half of last year's
amount. Please see Adjusted EBITDA reconciliation below.

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:

  oAs we previously announced, we expect to generate at least $500 million of
    additional liquidity over the next twelve months.
  oWe 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.
  oFurther 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.

Adjusted EBITDA Reconciliation
millions                                                         Range
• expected net loss attributable to Holdings' shareholders
                                                                 $(280) $(360)

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


• plus income statement line items 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 153    333
6, 2013


                                                                       
Adjusted EBITDA
                                                                 $365   $465



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

NEWS MEDIA CONTACT:
Sears Holdings Public Relations
(847) 286-8371

SOURCE Sears Holdings Corporation

Website: http://www.searsholdings.com
 
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