Sears Stays the Course

The retailer's holiday results continue a longstanding trend of slumping same-store sales results, reflecting the chains' competitive weakness, along with widening profit margins and higher profits.

By cutting costs and keeping prices high, Lampert has managed to squeeze strong cash flows out of the company. The strategy has delighted investors, but skeptics wonder how long the process can continue before the company has to consider new strategic options.

Investors have been speculating for months that Lampert is looking to use the cash to expand his empire.

Sears said that it expects to end the fiscal year with approximately $3.5 billion in cash and cash equivalents, excluding Sears Canada. That marks a decline from the $4.4 billion it recorded at the end of 2005.

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