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Sears' Sales Drop Biggest Yet, But Profit Is Expected Due to New Taxes

Sears' Sales Drop Biggest Yet, But Profit Is Expected Due to New Taxes
Sears suffered its biggest-ever sales drop in store sales but still beat analysts' projections for the fourth quarter. (Scott Olson/Getty Images)

By    |   Thursday, 15 February 2018 05:27 PM

Sears' same-store sales showed its biggest-ever drop during the fourth quarter of 2017, but the company says it expects to turn a profit for the period because of the new tax laws passed by Congress and signed into law by President Donald Trump in December.

Sales for stores open at least a year fell 15.6 percent in the last part of 2017, with an 18.1 percent drop at Sears' domestic stores and a 12.2 percent drop at Kmart locations, The Wall Street Journal reported.

Revenue in the fourth quarter, which ended Feb. 3, is expected to be $4.4 billion, down from $6.1 billion a year ago, but still above estimates of $3.86 billion from analysts, The Wall Street Journal reported.

Sears has closed hundreds of locations over the past two years and sales have fallen in the last 24 consecutive quarters, Fortune reported.

Despite the dismal sales numbers, however, Sears said it expects to turn a profit of $140 to $240 million for the quarter because of a projected $445 million to $495 million benefit it will get from the new tax laws, Business Insider reported. The company also said that closing unprofitable stores, while it was responsible for a large part of the sales drop, has allowed the company to perform better overall.

Besides closing the stores, Sears has begun to sell its Kenmore and DieHard products on Amazon.com as part of its effort to rely less on physical space in its sales, CNBC reported.

Sears stock prices jumped more than 16 percent Thursday afternoon on the news, Business Insider reported.

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Sears' same-store sales showed its biggest-ever drop during the fourth quarter of 2017, but Sears says it expects to turn a profit for the period because of the new tax structure passed and signed into law.
sears, biggest, sales drop
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2018-27-15
Thursday, 15 February 2018 05:27 PM
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