Sears expects full-year profit above year ago

Sears Holdings Corp. expects its fourth-quarter adjusted profit to come in sharply above last year's results thanks to stronger sales at its Kmart chain -- a sign fortunes slowly may be improving for the long-struggling retailer.

The news Thursday morning sent Sears shares to a more than 15-month high, passing $100 per share -- something not seen since September 2008.

Sears and Kmart, both led by financier Edward Lampert, have seen shoppers flee to larger rivals with more prestige and more products at better prices. But late last year, glimmers of resilience began to emerge when shoppers returned to Kmart stores as the recession wore on.

On Thursday, Sears predicted a fourth-quarter profit between $385 million and $465 million, $3.36 to $4.06 per share, for the period that will end Jan. 30. Those figures exclude the impact of store closings, impairment and restructuring charges and gains and losses on hedge transactions. The company did not specify how great the impact of each exclusion could be.

Despite the wide range, Sears' forecast is sharply above the $2.65 per share expected by analysts surveyed by Thomson Reuters. Those estimates generally exclude one-time items.

During the same period last year, Sears' adjusted profit was $360 million, or $2.94 per share. That figure excluded one-time items, which often vary quarter to quarter.

For the full year, Sears anticipates an adjusted profit between $190 million and $270 million, or $1.61 per share to $2.29 per share, excluding one-time items.

Analysts expect a full-year profit of $1.10 per share.

Last year, Sears' adjusted profit amounted to $215 million, or $1.69 per share.

Meanwhile, the retailer said Kmart continued to show signs of life during the critical holiday season, helping Sears Holdings post a slight increase in a key sales figure for December.

The merchant, based in the Chicago suburb of Hoffman Estates, reported a 0.4 percent rise in sales at stores open at least a year for the period ended Jan. 2.

It was largely helped by a 5.3 percent increase in sales at Kmart stores open at least a year, where shoppers snapped up toys, home goods and clothing at the discount chain.

Sears typically doesn't release monthly sales results. Sales at stores open at least a year are a key indicator of retailer performance since they measure growth at existing ones.

Kmart began to show a glimmer of hope during the third quarter, when sales at stores open at least a year edged up less than 1 percent. While the improvement was small, it was the first time in at least seven years that the sales figure increased at the chain's stores.

Sears shares climbed $12.54, or 14.1 percent, to $101.41 in morning trading Wednesday. Its shares reached as low as $34.27 in March.