Sears eyes earnings growth, surprising analysts After overhauling its spend management and implementing sweeping cost reduction initiatives, Sears could return to profitability this year, company executives assert.

Sears Holdings Corp. has struggled over the past few years to drive shoppers to its stores amid mounting competition from both brick-and-mortar and online rivals. Still, the company said this week it expects to post a first quarter profit, surprising investors. The uptick in earnings is fueled by the company's decision to sell a number of its locations in North America, a move that generated hundreds of millions of dollars in cash.

The Associated Press reports investors cheered the company's restructured guidance, sending shares nearly 18 percent higher. Over the past year, the company's stock has increased 66 percent, as company executives have increasingly touted a revamped business model they affirmed would fuel future growth.

Sears said it expects to earn between $155 million and $195 million in its first fiscal quarter. Analysts had largely projected the company would post a loss, and the surprisingly robust estimates emboldened investors. Nevertheless, Sears noted it earned approximately $235 million through the sale of select U.S. and Canadian locations. The company has no further plans to sell brick-and-mortar stores.

Without the real estate sales bolstering its earnings, Sears' projected loss would register between $40 million and $80 million, according to the AP, a figure that still surpassed analysts' expectations. In the same quarter the year prior, Sears reported a loss in profits of around $165 million.

Lou D'Ambrosio, the company's president and chief executive, said the latest earnings forecast showed how the company is continuing to stage a turnaround. He affirmed the bullish growth forecast, noting traffic in the retailer's stores is steadily climbing.

"If we execute with a focus on our customers and take actions to improve operations we can change the direction of our company," he said in a note to employees. "We are doing that and we're starting to see the results."

He conceded, however, the retailer has a ways to go before it returns to posting massive earnings growth.

"However, this is just the beginning," he continued. "We have a way to go to restore the strength of Sears Holdings."

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