Photographer: David Paul Morris/Bloomberg
Sears Jumps After Tax Overhaul Brings Surprise Quarterly ProfitBy
Comparable sales continue to plunge for department-store chain
Fourth-quarter profit tied to U.S. corporate tax changes
Sears Holdings Corp. got a boost in the latest quarter in the form of a tax benefit, giving a degree of relief to the beleaguered retailer even as sales continue to spiral.
The company reported net income of $140 million to $240 million for the period, marking only the fourth time the company has posted a quarterly profit in the last six years. The results sent the shares up as much as 19 percent on Thursday, the most in more than two months.
Sears has posted a string of losses as it copes with tumbling sales and the shift of shoppers online. To stay afloat, the company has eliminated jobs, refinanced debt, closed stores and sold off assets.
While the tax changes are helping the company’s finances, there’s still no sign that plummeting sales are stabilizing. Same-store sales -- a key gauge of a retailer’s health -- fell 15.6 percent. Revenue came in at about $4.4 billion, 28 percent lower than a year earlier.
The recent U.S. tax overhaul helped generate a noncash benefit of $445 million to $495 million, the company said. It also plans to write down the Sears name by $50 million to $100 million, a sign of the retailer’s diminished prestige.
The company’s shares, which rose to as high as $2.73 on Thursday, have lost about two-thirds of their value in the last 12 months.