NEW YORK (AP) — Shares of Sears took a big tumble Friday after the struggling retailer said it expects a hefty loss for the fourth quarter and full year following a disappointing holiday season.
THE SPARK: On Thursday, Sears Holding Corp. said sales during the critical holiday shopping period dropped sharply. As a result, it said it expects an adjusted loss between $213 million and $316 million, or $2.01 to $2.98 per share, for the fourth quarter.
For the year, it forecast an adjusted loss between $811 million and $914 million, or $7.64 to $8.61 per share.
Two analysts surveyed by FactSet had expected a profit of 38 cents per share for the fourth quarter and a loss of $6.80 for the year, on average.
THE BIG PICTURE: Sears has been trying to restore profitability by cutting costs, reducing inventory and selling off some assets and spinning off others as it continues to lose business to nimbler rivals such as Wal-Mart Stores Inc.
The company also says it's focusing more heavily on its most loyal shoppers through its Shop Your Way loyalty program.
But analysts aren't sure the efforts will succeed.
"As Sears passes off its good locations and its profitable segments, and loses market share to stronger retailers in its core franchises, the hope of this disaster turning around becomes remote," Credit Suisse analyst Gary Balter said in a note to investors Friday.
Sears' latest numbers also underscore the pressure facing Eddie Lampert, hedge fund billionaire and Sears' chairman and CEO. Lampert engineered the combination of Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy.
SHARE ACTION: The stock was down $6.65, or nearly 16 percent, at $35.92.
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Original headline: Sears' stock falls after disappointing holidays
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