9 must-know Sears & Kmart stats to share on social media
1. 29 percent: The percentage of the third-quarter 2013 sales drop that came from same-store sales, or stores open for longer than a year. Message: further market-share loss (can also infer this in the 10-Q comments explaining the sales declines at the divisions, as detailed below) despite traditional promotional efforts and the new "Shop Your Way" rewards program. With the loss in market share, the value of the top brands at Sears (for example Craftsman and Land's End) underlying the company's credit facilities and outstanding debt erodes, potentially impacting future borrowing ability and raising the cost of credit. I think this is a particular trend to watch in front of: (1) Sears' domestic credit facility maturity in April 2016; (2) Sears Canada credit facility maturity in September 2015.
2. 70 percent: the percentage of sales in the third quarter of 2013 devoted to "Shop Your Way", up from 65 percent in the year-earlier period. I reiterate this program is establishing a new low for the company's gross profit margin structure, a low that has yet to be fully realized. As this program rose as a percentage of sales in the third quarter, Kmart's gross profit margin fell 160 basis points due to sales declines in "most categories." Excluding one-time items, the Sears division's gross profit margin declined 60 basis points in the quarter, owing to weak sales in home appliances and apparel. In fact, while we are at it, let's track some 10-Q comments by Sears regarding its once bread and butter divisions in consumer electronics, tools, and appliances:
i. Q1 2013: Noted sales "declines in the consumer electronics and tools categories."
ii.Q2 2013: Noted sales "decrease in the home appliance category."
iii. Q3 2013: Noted sales "decreases in most categories including the consumer electronics, lawn and garden, tools, home appliances and apparel categories, as well as declines at Sears Auto Centers."
3. $208 million/$585 million: respective 39-week operating losses from Kmart and Sears.
4. -160/-80/-200 basis points: respective 39-week gross margin declines for Kmart, Sears Domestic, and Sears Canada.
5. -50.87 percent: 39-week decline in capex for Sears Canada. Total capex as a percentage of segment sales of 1.03 percent versus 1.09 percent a year earlier.
6. -53 percent: 39-week decline in capex for Kmart. Total capex as a percentage of segment sales of 0.4 percent (yes for real) versus 0.9 percent a year earlier.
7. 1.28 percent: 39-week ratio of capex to sales for Sears Domestic versus 0.7 percent a year earlier. By comparison on a 39-week basis: (1) Macy's 2.08 percent; (2) Wal-Mart 2.76 percent; Target 5.6 percent (inflated by company's entry into Canada).
8. 9: number of quarters for negative same-store sales from Kmart.
9. 1: number of positive same-store sales quarters for Sears Domestic out of the past eight quarters.
(Read more: Why Best Buy may be a bad buy: strategists)
A chilling chart: Sears debt yield
Amid Sears' worse-than-expected financials in 2013, and in spite of ample access to liquidity, yields on the company's debt have crept higher. Draw your own conclusions from the one-year chart below.