And the market says: whenever Sears Holdings Corp. (SHLD) decides to report its second quarter results, they will likely be terrible.
So much so they will probably spur renewed debate on the chain's ability to survive deep into 2019. Sears shares crashed more than 16% on Monday on no apparent news. Over the last three months, Sears stock has plunged 41%.
Sears has not set a date for its second quarter earnings release, per its investor relations page. The company would be among the last retailers to announce results for the quarter.
Sears spokesman Howard Riefs did not return a request for comment on the timing of the second quarter earnings report.
The Latest Sears Selloff
Sears chairman and CEO Eddie Lampert wrote a letter to the board in mid-August offering to buy what's left of the Kenmore home appliances business. In the letter, Lampert offers several clues Sears could be headed into its final holiday season amid a major cash crunch. Take note of the comments in bold as they are red flags on Sears current cash position:
"We are writing to submit a non-binding proposal to acquire Kenmore and SHIP and to update the Special Committee regarding our plans with respect to Parts Direct and certain other transactions, as well as to re-emphasize our firm belief that these transactions should be undertaken together with tender and exchange offers designed to allow Sears to reduce its debt, extend its maturity profile and alleviate its liquidity challenges." "As we noted in our May 25, 2018 letter to the Special Committee, speed and certainty here are critical. We believe, therefore, that an expedited process is in the best interest of all parties involved."
Why is "speed and certainty critical" in Sears case?
Keep in mind for the 13-weeks ended May 5, Sears chewed up $1.2 billion in cash just to support its operations that continue to hemorrhage money. The company ended the first quarter with a mere $466 million in cash ahead of shipments of the all-important back to school, early fall shopping seasons. That's a poor position to be in for a retailer of Sears' size.
It's reasonable to expect the company had another brutal second quarter (as the market thinks) and suppliers are getting worried about being paid for the holidays. This isn't rocket science stuff, it's standard procedure for retailers that are falling apart -- we have seen the script before.
Here's a dose of simple research TheStreet did on Sears back in March before the stock's latest plunge.