NEW YORK, January 24, 2013 /PRNewswire/ --
Sears Holdings Corporation (NASDAQ: SHLD) [ Full Research Report] (1) recently announced the resignation of CEO Lou D'Ambrosio, whose his two-year term continued the company's five consecutive years of declining revenue. The new CEO, Edward S. Lampert, has increased his stake from 56.2% to 56.5%, causing the stock to rise 41% over the last 12 months. Morningstar analyst Paul Swinand comments on the rise on the stock, "[Lampert]'s buying again so it builds confidence and fear for anyone who is short the stock." Lampert is designated to take over the position of CEO on February 2.
The company's earnings have been steadily declining at a rate of 37% annually for the last five years. With a negative cash flow of - $248 million and a profit margin of -7.1% in the last 12 months, the company's earnings per share for the fiscal year ending in January 2013 are expected to be around - $2.64, and next year's earnings per share are projected lower at - $3.60 per share. While the company's stock may be rising now due to Lampert's increased stake in the company, the stock price should continue its declining state as the company continues to lose money and as the rate of negative earnings growth increases.
Former CEO D'Ambrosio had previously worked at a telecommunications company called Avaya and International Business Machines, and with his experience, he boosted the company's ecommerce initiatives. Sears and its competitor, JCPenney, have lost half of their market share to Amazon, the online retailing giant. This showed the crucial need for improved ecommerce efforts from the company, and eventually led to the launch of ShopYourWay.com, the company's free membership program and shopping community.