U.S. department store operator Sears Holdings Corp. reported a profitable fiscal fourth quarter after receiving a $470 million benefit from U.S. federal tax reform, announcing at the same time that it closed on $440 million in additional loans.
Sears reported net income attributable to shareholders of $182 million, or $1.69 per diluted share, for the fiscal fourth quarter ended Feb. 3, in line with the company's net income expectation of between $140 million and $240 million. The S&P Capital IQ consensus estimate for GAAP EPS was $1.25. In the year-ago quarter, Sears posted a net loss attributable to shareholders of about $607 million, or a loss of $5.67 per diluted share.
Total revenue during the fourth quarter came in at $4.38 billion, above the S&P Capital IQ consensus estimate of $3.86 billion but down from $6.1 billion a year ago.
For the full fiscal year, the department store operator reported revenue of $16.7 billion, compared to $22.14 billion in the previous year. Sears said total comparable sales fell 13.5% in 2017, with comparable sales at Sears stores slipping 15.2%, while those at Kmart fell 11.4%.
The Illinois-based retailer said it has secured a loan of $440 million, $407 million of which will relieve Sears of contributions to its pension plans for about two years. The loan is secured by properties that were previously part of a so-called ring-fence agreement with Pension Benefit Guaranty Corp. Sears said it expects to pay down a substantial portion of the secured loan in the next three to six months using the sale of the collateralized properties.
Sears CFO Rob Riecker said the company is planning for an annual cost reduction of $200 million, not related to store closures.