Sears Holdings Corp SHLD
Q3 2012 Earnings Call Transcript

Transcript Call Date 11/15/2012

Operator: Good day, ladies and gentlemen and welcome to the Sears Holdings Fiscal 2012 Third Quarter Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference is being recorded. I would now like to introduce your host of today's conference Bill Phelan. Sir, you may begin

William K. Phelan - SVP, Finance: Thank you, operator. Good afternoon and welcome to Sears Holdings Earnings Call. I am Bill Phelan, Senior Vice President of Finance for Sears Holdings. Joining me today are Lou D'Ambrosio, our Chief Executive Officer; Rob Schriesheim, our Chief Financial Officer; and Ron Boire, who leads merchandising at our Sears and Kmart Formats; and Imran Jooma, who leads our online business and marketing efforts.

For our call today, you may follow along with the slides that are shown. Slides will be automatically advanced during the discussion and will be posted at our website.

Before we begin, I would like to remind you that today's discussion will contain forward-looking statements related to future events and expectations. These statements are based on current expectations and the current economic environment, and actual results may differ materially from those expressed or implied in the forward-looking statements. You can find factors that could cause the Company's actual results to differ materially listed in today's press release, in the presentation for today's call that is posted at the Investor Information section of and in our most recent SEC filings.

In addition, our discussion will include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measure can be found in today's press release. Any reference in our discussion to EBITDA means adjusted EBITDA as defined in the press release and presentation. Finally, we assume no obligation to update the information presented on this call except as required by law.

I would now like to turn the call over to Lou.

Louis J. D'Ambrosio - CEO and President: Thanks, Bill and let me thank everyone for joining the call today. When we held our annual meeting in May we outlined three priorities for our Company. Financial and operational discipline, core retail excellence and innovation for our customers and members; specifically through Integrated Retail and our SHOP YOUR WAY membership program. We've made progress in each and will touch on them during today's call.

For the third quarter we had modest EBITDA growth year-over-year, led by some of our most important categories, like Appliances, Apparel and Home Services. In fact, we also had comp store growth in Sears Apparel and Appliances. This was partly offset where we have some challenges in areas like consumer electronics and grocery and household which we will discuss. We're on track to generate $1.8 billion of additional liquidity, $1.7 billion is done. These numbers far exceed the target we set during the earnings call we had in February.

So the effect of these actions is that our current position coupled with a significant reduction in near-term obligations gives us substantial financial flexibility and we intend to continue to take actions that create value and retain the flexibility to invest in the strategic priorities of our Company. We have significant assets, some of the best brands in retail, over 200 million square feet of real estate, more than $5 billion of inventory already paid for, and the largest Home Services business to name a few.

Read our Earnings Call Transcript disclaimer.
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