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Sears cites expected YOY improvement in Q4 results

Sears Holdings Corp. said Feb. 15 that it expects to deliver a year-over-year improvement in its results for the fourth quarter ending Feb. 3, 2018.

The retailer said it expects its net income to total between $140 million and $240 million. This is inclusive of a noncash impairment charge related to the Sears trade name of between $50 million and $100 million. Sears said it expects to book a noncash benefit of approximately $445 million to $495 million from U.S. tax reform.

The Illinois-based retailer booked a net loss attributable to Sears Holdings' shareholders of $607 million for the fourth quarter a year ago. That loss included a noncash impairment charge related to the Sears trade name of $381 million.

Sears said it expects its fourth-quarter adjusted EBITDA to come in somewhere between a loss of $10 million and profit of $10 million, compared to an EBITDA loss of $61 million a year ago. Sears attributed this EBITDA improvement to restructuring steps taken in 2017, which included the closure of loss-making stores.

The retailer said it now expects total revenue to be $4.4 billion for the 14-week period ended Feb. 3, down from $6.1 billion a year ago. The retailer noted that the fourth-quarter period a year ago had one fewer week in its reporting period. The retailer said total comparable sales fell 15.6%. Comparable sales at Sears stores slipped 18.1%, while those at Kmart fell 12.2%.

The department store operator also said it commenced private exchange offers for its outstanding 8% senior unsecured notes due 2019 and 6.625% senior secured notes due 2018.