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Jan 11, 2011
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Sears sees Q4 earnings above Wall Street

By
Reuters
Published
Jan 11, 2011

Sears
Shoppers at Sears store in Woodbridge Mall, USA
Jan 11 - Sears Holding Corp forecast a quarterly profit above Wall Street expectations, on strong sales in its toys, home and sporting goods categories, sending its shares up as much as 8 percent in pre-market trade.

The parent of Sears department stores and Kmart discount chain said it sees earnings of $370-450 million, or $3.39-$4.12 a share, for the fourth quarter ending January 29.

Analysts on an average were expecting earnings of $3.09 cents a share, according to Thomson Reuters I/B/E/S.

Sales at Sears domestic stores open at least a year were down 6 percent, while comparable store sales at Kmart discount stores were up 2.3 percent.

Sears Domestic's sales decline was primarily due to a decline in consumer electronics, appliances and tools, the company said in a statement. In contrast, footwear, jewelry and automotive categories did well.

The company said strong sales in toys, home, sporting goods, apparel and footwear categories was partially offset by a decline in food, consumables and pharmacy categories.

Sears, led by hedge fund manager Edward Lampert, has struggled to tackle competition from mass merchants like Wal-Mart Stores Inc and smaller chains like Dollar Tree Inc.

The Sears store chain has been plagued by market share losses, especially in appliances and apparel. Kmart has, however, managed to retain some bargain-hungry U.S. shoppers.

Shares of Sears Holdings were up 7 percent at $75 in trading before the bell. They closed at $70.60 on Monday on Nasdaq.

(Reporting by Dhanya Skariachan in New York and NR Sethuraman in Bangalore; Editing by Roshni Menon)

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