Sears rallies after predicting adjusted EBITDA improvement in Q4
Sears Holdings said in a regulatory filing that "despite challenges in the retail environment" during Q4, it expects to deliver another quarter of improvement in adjusted EBITDA. The company expects adjusted EBITDA of between ($10M) and $10M for Q4 compared to an adjusted EBITDA loss of ($61M) last year. "This year-over-year improvement continues to demonstrate that the restructuring actions taken in 2017, including the closure of unprofitable stores, have resulted in meaningful improvement in our performance," Sears said. It expects total revenues of $4.4B for Q4, compared to $6.1B in the prior year Q4. Total comparable store sales for Q4 declined 15.6%, comprised of a decrease of 12.2% at Kmart and a decrease of 18.1% at Sears Domestic. In addition, Sears expects net income of between $140M and $240M in Q4, which is inclusive of a non-cash tax benefit of approximately $445M-$495M related to tax reform, as well as a non-cash impairment charge related to the Sears trade name of between $50M and $100M. Sears today commenced private exchange offers for its outstanding 8% senior unsecured notes Due 2019 and 6 5/8% senior secured notes due 2018. The stock in premarket trading is up 22c, or 10%, to $2.52.