Sears Holdings will likely show its softer side when it reports quarterly earnings Thursday.
The owner of the struggling Sears and Kmart chains – controlled by hedge-fund tycoon Eddie Lampert – has lately seen more turnover in its top ranks.
The head of the company’s home-services business said he plans to quit this week. He will be replaced by a former Motorola executive. Also, Sears’ top marketing executive, Maureen McGuire, will leave at the end of the month.
The revolving door is catching Sears as its shoppers are being pummeled by a sluggish economy.
The retailer has taken steep markdowns to clear slow-moving summer merchandise, and that’s likely to hit second-quarter profits, industry watchers say.
A survey of five analysts by Thomson Financial predicts earnings will plunge 71 percent from a year ago. But Morgan Stanley analyst Gregory Melich thinks the profit drop will be even steeper as same-store sales, or sales at stores open at least a year, fall 6.5 percent.
The same-store sales declines could grow worse during the crucial fall and holiday seasons should Sears decide to protect profits by reining in spending on inventory and advertising, analysts said.
In addition, Sears’ sales of big appliances, tools and electronics are being hit as nimbler, better-focused competitors like Lowe’s and Best Buy continue to grow, Kaufler said.