Sears shares see mysterious drop

The has-been retailer will report its monthly sales numbers Thursday. Are traders bracing for bad news?

By Kim Peterson May 30, 2012 2:36PM
Image: Sears sign© Spencer Platt/Getty Images News/Getty ImagesUpdated 4:20 p.m. ET

Why are shares of Sears Holdings (SHLD) down?

The stock fell nearly 9% Wednesday afternoon, but there wasn't an apparent reason. Other retailers were seeing smaller sell-offs -- Kohl's (KSS) fell 3.6%, and JC Penney (JCP) closed down 3.5% after it changed its promotions strategy.

Sears has been in an intense drop from mid-March, when it topped $83 a share. By early afternoon, trading volume was already at 1.6 million, higher than the daily average of 1.36 million. The stock closed Wednesday at $52.34.

One StockTwits contributor noted that the stock was approaching a death cross -- where the short-term moving average was falling below the long-term moving average. "SHLD should hit high $40s soon," wrote the contributor, the financial analysis company The Oxen Group.

Sears is expected to report its monthly sales numbers Thursday, so the drop may be in anticipation of bad news.

Analysts are down on the stock, with five giving it an "underperform" rating, one giving it a "hold" and one calling it a "strong buy."

Sears is in the middle of an ongoing restructuring effort. The company reported a first-quarter profit earlier this month, but that was accomplished only through the sale of stores. Same-store sales were down 1% at Sears stores and 1.6% at Kmart stores, which Sears also owns.

Tags: JCPSHLD
30Comments
May 30, 2012 4:47PM
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Sears refuses to retain the business model that made them successful in the first place.  And when a CEO uses company funds to build a mansion when the company hasn't made a profit in years, it shows that Sears has some gigantic problems.
May 30, 2012 4:17PM
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Sears has never been a store that has been known for fashion. Craftsman tools and Kenmore Large Appliances and practical clothes were the reason my family shopped Sears. I can honestly  say  I have not been in a Sears since 2007. They merged with a failing corporation Kmart. which has only led to more failure. Sears is heading the same direction Montgomery Wards... Only a Miracle will save Sears.... Re-invention with Management that doesn't wear DOUBLE KNIT DACRON/POLYESTER.
May 30, 2012 3:35PM
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CEO selling the floor out from under other share holders. That's my guess. Probably can't wait to move into his new $40million house in Florida so he can be neighbors with Angelo Mozilo of Countrywide mortgage fame. I say wait util they are all behind their gates and then put a big padlock on them and don't ever let the Scumbags out again. 
May 30, 2012 4:00PM
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Sears management is still living in the dinosaur age and their stores are completely out of focus.

I buy craftsman tools on line because going to the stores is a painful experience now days. The clerks' are poorly trained in their products and rude

May 30, 2012 3:35PM
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Becuz they sell Kartrashian products
May 30, 2012 5:02PM
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Sears lost me forever as a customer right after last year's April tornadoes. A circuit board on my dryer (purchased at Sears) went out and they sent one of their A&E Factory service techs out to fix it. I had a premium warranty which was supposed to pay for parts and labor. The tech charged me the full price of the new part and the labor to fix it up front. The part he ordered which was supposed to come to my house within a week never showed up. After many calls it turned out he had ordered an incorrect part number so they didn't bother following up. I had to fix it myself which was easy once I had electricity again...got on line with a super appliance parts house in Tn that diagnosed the problem for me and delivered the correct part the next day by UPS. It only took 10 minutes to replace it. It also took me over a dozen phone calls that spanned over 7 hours on the phone to get my money back from Sears and that took close to four months. Sears absolutely sucks and I was a customer since the 70's. Screw you Sears and I hope you go bankrupt.
May 30, 2012 4:04PM
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In the past Sears had everything for everyone.  With specialty stores like Home Depot and Best Buy, there isn't any reason to shop at Sears anymore. Today Sears looks like five acres of clothes with one salesperson to help you find things and ring you up, not to mention giving you a five minute speech as to why you should open a Sears Mastercard account.

Sears went down hill about ten years ago, when they started centralizing services, such as the credit department and cutting the sales staff in half.  There was a time you could talk to a person face to face about a credit issue, not any more.

Sears lost it way, and lost a great many of it customers.  It appears to be a ship without a rudder.

May 30, 2012 4:45PM
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Sears should have Kept the "Wishbook"! They went downhill from there.

May 30, 2012 4:30PM
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Yeah Sears was great back in the day. I really think Sears could make a come back. Hell if Sam's Club can convince people to buy 20 pounds of tuna or just tons of stuff they don't really need and make them think there in a CLUB and getting a really great deal, i'm shore Sears could sale a washer and dryer again.   
May 30, 2012 4:33PM
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I agree with charles.I bought a kenmore washer and dryer from sears about ten year ago I had to send them back about ten time ,the kept delivering me scratch up dented up waser and dryer.I called and told some manger if you deliver another one like the last ten just refund my money.Six months later a lady call me from sears and said I just looking through our records and it showed You ten delivery of a washer and dryer to your residents what happen.I laugh and hung up i refused to explain it angain for the fourtenth time.

bill

May 30, 2012 4:06PM
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Do what Wal-Mart dose. lie to the customer. Keep telling them there getting everyday low prices. Make them think there getting a great deal when really there not. 
May 30, 2012 5:47PM
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Purchased a new electric kitchen stove from Sears. They would not connect the stove unless we had a wall plug. Stove went back & sale was cancelled. Brought new stove from local family business. Brought a new ref from Sears a few years age - it has not held up, the plastic bins & shelves are cheaply made & pure junk. Guess where we will go for our new washer & dryer?

Closed our Sears account after doing business with them for over 45 years. Not worth the hassle.

We have a great family owned hardware store in town. Just got our new Char-Broil grill from them.

Also buy most all of our hardware, plumbing, lawn & garden supplies there.  

 Don't shop at Home Depot, K-Mart, Target,  and very little at Walmart. 

 Love the quality at Orvis, Woolrich, Mast General Store, L.L. Bean, and Lands End.

We will have zero balance on all charge accounts by December, 2012.. 

 

May 30, 2012 11:30PM
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I predicted Sears upcoming demise maybe 3 years ago. That was based on observations. Every time I drove by the Sears store in my town the parking lot looked like a ghost town. I was working in a town about a hour drive North of home for a few months. Drove by the Sears in that town every day. Same deal, ghost town every time I drove by. Then I went out of state for a job. A Sears store caught my eye and guess what? Parking lot looked like a ghost town.
After these observations I read a Motley Fool e-mail and Sears was a topic. I posted about my observations and my opinion about the end is near. Got ridiculed about Sears being a U.S. icon, etc.
After that I actually went in the local Sears store, first time in a Sears in well over a decade, looking for a tool. The parking lot had as many cars as you would see at any given 7-11. Inside the store, employees vastly out-numbered customers, the atmosphere seamed more like a intensive care unit or a funeral home, and they didn't have what I wanted.

May 30, 2012 6:51PM
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@Retired Twice. It's good that you support you neighborhood stores. If we as a society spent just a little more of our money at these types of stores, they would flourish. But, there are too many who look at the bottom line, IE:price. I am not defending the CEO by any means, but if we want good service, quality items that last, etc. then we have to remember we have to support the people in the USA that we want to make a decent living at the factories. We can't continue to expect full service and quality built tools and appliances made by people here, then scoff at the price and go buy at Walmart. It's been a slow process that we created. Remember the microwave back in 1985 that cost $250 but I swear is still in your mother's kitchen? Built by us and lasts for years!!! Now you would laugh and buy it at Walmart for $49-59 maybe but it lasts only a few years. What is the difference? Our jobs and the crappy service that took it's place, that's what.
May 30, 2012 6:20PM
May 30, 2012 7:10PM
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its no longer an  " employee friendly company"    Has to fail.  Its the  employees that make or break a company, managment does no seem to get that, from the top to the bottom.The appliance service department ( A&E) has lost touch with the reason they are there, to service the sold product. Not anymore- dont matter if you repair the product- sell a service contract, water filter, etc etc and you will be the hero. Upset the customer- dont matter- did they buy a cleaning brush?? now thats important.
May 30, 2012 6:47PM
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I really cannot believe anybody wonders why Sears stock is falling? OMG what rock did you climb out from under? Sears is done.
May 30, 2012 6:55PM
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Sears is falling because they have the Katrashians.  It's simple.
May 30, 2012 7:46PM
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No more "perks" for the customer such as no interest for one year, free delivery, and standing behind their appliances instead of fixing them with paper clips and bubble gum.  They used to replace appliances which were obviously no-good shortly after they were purchased.   Now they use their paper clip & bubble gum repairs.   They also just do very cursory checks on the appliance that is not functioning properly.   Then there are the stores:  they are disorganized, the employees don't want to help the customers find a particular item, etc., etc.   The coupons are no good anymore.  They used to give coupons that were good for ANYTHING, from original price to CLEARANCE price.    Now the coupons are good only for certain items and don't include clearance merchandise.   No incentives for the customer to buy their products.    In the summer, the stores air conditioning is set to a very high temperature.  Certainly not conducive to shopping here in the South (Houston).   Being in the store in the spring or summer is like being in a sauna.  Wake up, Sears/KMart, before it is too late!!!
May 30, 2012 7:00PM
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I put them right up there with Walmart!  J.C. Penny will be the next to go.......JMHO.
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