Edward Lampert, the hedge fund manager of ESL Investments and current chief executive officer of Sears Holdings Corp (NASDAQ:SHLD) incurred approximately $639 million in losses from his holding in Sears after its stock price plummeted by as much as 19 percent to $47.33 per share on Friday trading in New York.
Sears Holding Corp’s Stock Value Declined By The Results
The decline of the stock value of Sears Holdings Corp (NASDAQ:SHLD) was triggered by the earnings results of the company for the first quarter of fiscal 2013. The stock suffered the biggest intraday decline since November 16.
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Based on regulatory filings, Lampert and his hedge fund own 55 percent or 58.9 million shares of Sears Holdings Corporation (NASDAQ:SHLD) as of April 30. Bloomberg estimated that the intraday decline reduced the market value of his holding in the company from $3.43 billion to $2.8 billion.
Sears Holdings Corporation (NASDAQ:SHLD) reported a net loss of $279 million or $2.69 loss per diluted share for the first quarter of 2013. During the same period a year ago, the company posted a profit of $189 million or $1.78 earnings per diluted share. Its EBITDA was -$8 million compared with its $160 million EBITDA in the same quarter in 2012.
The company’s revenue was $8.5 billion (quarter ended May, 4, 2013), a decline of $818 million from its $9.3 billion revenue in the first quarter a year earlier that ended April 28. According to the company, its revenue dropped because it has fewer K-Mart and Sears full-line stores in operation, and lower comparable store sales. It is also affected by the separation of Sears Hometown and Outlet Stores, Inc.
Sears Holdings Corporation (NASDAQ:SHLD) cited that its revenue from Sears Hometown and Outlet Stores, Inc was approximately $430 million versus its $620 million revenue last year. The company said its comparable store sales in the United States dropped by 3.6 percent due to cooler spring temperatures experienced by a majority of the regions in the country, and Sears Canada’s comparable store sales declined by 2.6 percent during the first quarter.
The company said the sales of its online stores, Sears.com and Kmart.com, increased by 20 percent compared with its performance a year ago. Sears Holdings Corporation (NASDAQ:SHLD) cited that the SHOP YOUR WAY platform generated more than 60 percent of the company’s revenues from Kmart and its domestic operations.
In a statement, Lampert said, “Our recent financial performance has not been acceptable, although we have seen some positive momentum as sales per member increased and our online business grew 20 percent in the quarter.”
“During the quarter, we have accelerated our activity to transform Sears Holdings into a leading Integrated Retailer that fosters relationships with members through our SHOP YOUR WAY platform. We launched new mobile capabilities, like Member Assist, which allows our members to communicate directly with our consultative store sales staff remotely in a manner most convenient for our members. We believe that if we leverage technology to provide our members with the easiest, most seamless shopping experience possible, we will be successful,” added Lampert.