In advance of its annual meeting tomorrow, Sears Holdings Corp. (NASDAQ: SHLD) this morning announced that its first quarter same-store sales fell -1.3% compared with the same period a year ago. The stock is up sharply on the news.
Well, not exactly on that news. Sears also announced that it expects to post EPS for the first quarter of $1.46-$1.84, way above the consensus estimate for an EPS loss of -$1.69. The company is realizing a one-time gain of $235 million from sales of US and Canadian stores. Sears expects net income in the range of $155-$195 million, including the sale.
A back-of-the-envelope calculation using the mid-point of the company’s net income projection ($175 million) indicates that the company would post an adjusted EPS of $1.64 based on 106.4 million shares outstanding. Still a good beat.
Sears also filed a preliminary Form S-1 yesterday announcing a rights offering for a spin-off of the company’s Sears Hometown and Outlet Stores into a separate company. Sears expects the rights offering to add $400-$500 million to the mother ship’s cash balance.
The rights offering and the profit forecast have combined to boost Sears’ stock in the pre-market this morning. Shares are up 6.8% at $57.43 in a 52-week range of $28.89-$87.50.
The company’s S-1 filing is available here.