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Why Is Sears Holdings (SHLD) Stock Down Today?

Ryan McQueeney
Updated

It’s more bad news for investors of Sears Holdings SHLD as the stock has dropped over 6.5% in morning trading on Tuesday. The parent company of struggling retailers Sears and Kmart is falling yet again after warning that it would miss revenue expectations for the fiscal 2015 fourth quarter.

The once-great retailer expects revenues of $7.3 billion, which is short of the $7.43 billion that Wall Street was expecting. Sears total comparable stores sales fell by 7.1% in the fourth quarter, and total revenue is down about 10% on a year-over-year basis.

“The holiday selling season proved to be challenging, with historically warm weather and intense competition pressuring margins and driving comparable store sales declines, particularly in our apparel and related softlines businesses,” the company said.

In-store sales were bad across the board for retailers this holiday season, but total sales were actually up thanks to more and more customers getting their shopping done online. Although Sears originally made its name from catalogue sales, it never translated that history into a solid online ordering business.

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Unfortunately, Sears will probably never again be the staple of American retail that it once was. The company became too dependent on in-store appliance sales that depend on trained employees to seal the purchase. These days shoppers can do all of the research online and buy an appliance from Amazon AMZN for a better price.

With the company struggling as much as it has recently, expect Sears to do something drastic soon. Many investors think the company could be gearing up for bankruptcy.

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