Sears Holdings’ (SHLD) vulnerability to continued economic downturn is adversely affecting its top-line growth. The company recorded an 8.6% decline in same-store sales and closed 28 non-performing stores during fiscal 2009 second quarter amid a slump in the housing sector and sluggish apparel sales.
Moreover, intense competition from giant discounters, mass merchants and regional stores coupled with the seasonality of business and exposure to foreign currency fluctuations severely undermine the company’s future growth prospects and sustainability.
Consequently, we have changed the recommendation for the company from Neutral to Underperform as we anticipate it to perform well below the broader market.Zacks Investment Research
