Sears Boosts Buyback

Sears (SHLD Quote) warned for a second time that second-quarter results will be weak and added to its stock buyback plan.

The Hoffman Estates, Ill., operator of the Sears and Kmart chains said it now expects to make between $170 million and $185 million, or $1.13 to $1.23 a share, for the quarter ended Aug. 4. Sears made $294 million, or $1.88 a share, a year ago.

The announcement comes just a month after Sears first warned of soft second-quarter results. Back on July 10, Sears said it expected to make between $160 million and $200 million, or $1.06 to $1.32 a share, for the quarter. That was well below the $2.12 a share analysts surveyed by Thomson Financial were looking for at the time.

On Monday, the company cited rising markdowns in seasonal apparel for the weak forecast. Same-store sales fell 3.8% at Kmart and 4.3% at Sears in the latest quarter.

"While we recognize the housing market slowdown and other economic pressures have presented a noticeable headwind to the business, we are disappointed with our second quarter results," said CEO Aylwin Lewis. "We will work hard to improve our financial performance going forward."

Sears said it spent $800 million in the last month buying back stock and said its board approved a $1.5 billion repurchase plan. The company bought back $1.5 billion in stock during the second quarter at an average price of $153. Sears closed Friday at $133.10.