To: Glenn D. Rudolph who wrote (28734 ) 12/2/1998 3:26:00 PM From: Peter Bernhardt Respond to
Noted with interest from Briefing.com:SEARS (S) 44 9/16. Perhaps all their customers have moved on line. Before the open Wednesday, Dow 30 component and major retailer Sears (S) reported that same-store sales for the four weeks ended November 28 (including early Christmas shopping) fell 3.6%. This is a significant drop and if it is any reflection of how the holiday season is going, it is a troubling sign for retailing stocks. Sears, of course, has had problems in recent years and isn't exactly a growth company right now, but a drop of this magnitude is noteworthy. Sears also said that profits for the year ended December will be in the low single digits, which seems to suggest that the fourth quarter will be less than expected, as the consensus right now is for 6% growth, and there is only the fourth quarter left to report. The stock market, and Internet commerce stocks in particular, have built in expectations recently of a very strong holiday season. This may prove to be the case, as the economy is still strong, even if weakening a bit. But anything less than an outstanding season at this point could prove a disappointment, and these numbers from Sears are not encouraging. Sears stock hit was rising this summer on hopes that the company was experiencing a profit turnaround, and hit a 52-week high of 65 in June. It then tanked along with the market, and hit 40 in October before posting a modest rebound. That now looks in jeopardy. Sears remains in a rut, and declines in same-store sales for any company mean that it is losing its market position. This is clearly bad news for Sears, and whether it is bad news for the retail sector overall can not yet be determined, but it does raise early, modest warning flags.
