NasdaqCM:SHOS

Stock Analysis Report

Sears Hometown and Outlet Stores

Executive Summary

Sears Hometown and Outlet Stores, Inc. engages in the retail sale of home appliances, lawn and garden equipment, tools, and hardware in the United States.

Rewards

Trading at 91.1% below its fair value

Earnings have grown 5.9% per year over the past 5 years

Risk Analysis

Currently unprofitable and not forecast to become profitable over the next 3 years

Highly volatile share price over past 3 months

Does not have a meaningful market cap ($77M)



Snowflake Analysis

Adequate balance sheet and fair value.


Similar Companies

Share Price & News

How has Sears Hometown and Outlet Stores's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SHOS's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-6.3%

SHOS

2.6%

US Specialty Retail

1.5%

US Market


1 Year Return

33.9%

SHOS

17.3%

US Specialty Retail

20.1%

US Market

Return vs Industry: SHOS exceeded the US Specialty Retail industry which returned 23.7% over the past year.

Return vs Market: SHOS exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

SHOSIndustryMarket
7 Day-6.3%2.6%1.5%
30 Day-12.8%0.2%1.4%
90 Day37.7%4.1%8.7%
1 Year33.9%33.9%19.1%17.3%22.7%20.1%
3 Year-29.9%-29.9%45.0%38.1%50.1%40.5%
5 Year-77.4%-77.4%50.0%37.8%73.1%54.1%

Price Volatility Vs. Market

How volatile is Sears Hometown and Outlet Stores's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Sears Hometown and Outlet Stores undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SHOS ($3.4) is trading below our estimate of fair value ($38.05)

Significantly Below Fair Value: SHOS is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SHOS is unprofitable, so we can't compare its PE Ratio to the Specialty Retail industry average.

PE vs Market: SHOS is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate SHOS's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: SHOS is good value based on its PB Ratio (0.8x) compared to the US Specialty Retail industry average (1.5x).


Next Steps

Future Growth

How is Sears Hometown and Outlet Stores forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

11.4%

Forecasted Retail industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Sears Hometown and Outlet Stores has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Sears Hometown and Outlet Stores performed over the past 5 years?

5.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SHOS is currently unprofitable.

Growing Profit Margin: SHOS is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: SHOS is unprofitable, but has reduced losses over the past 5 years at a rate of 5.9% per year.

Accelerating Growth: Unable to compare SHOS's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: SHOS is unprofitable, making it difficult to compare its past year earnings growth to the Specialty Retail industry (4.5%).


Return on Equity

High ROE: SHOS has a negative Return on Equity (-61.31%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Sears Hometown and Outlet Stores's financial position?


Financial Position Analysis

Short Term Liabilities: SHOS's short term assets ($386.7M) exceed its short term liabilities ($302.9M).

Long Term Liabilities: SHOS's short term assets ($386.7M) exceed its long term liabilities ($5.7M).


Debt to Equity History and Analysis

Debt Level: SHOS's debt to equity ratio (119%) is considered high.

Reducing Debt: SHOS's debt to equity ratio has increased from 12.6% to 119% over the past 5 years.


Balance Sheet

Inventory Level: SHOS has a high level of physical assets or inventory.

Debt Coverage by Assets: SHOS's debt is covered by short term assets (assets are 3.4x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable SHOS has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: SHOS is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 64.9% per year.


Next Steps

Dividend

What is Sears Hometown and Outlet Stores's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate SHOS's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate SHOS's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SHOS's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SHOS's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SHOS's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.9yrs

Average management tenure


CEO

Will Powell (49yo)

4.3yrs

Tenure

US$1,577,857

Compensation

Mr. William A. Powell, also known as Will, has been the Chief Executive Officer and President at Sears Hometown and Outlet Stores, Inc., since July 01, 2015. Mr. Powell served as the Senior Vice President  ...


CEO Compensation Analysis

Compensation vs Market: Will's total compensation ($USD1.58M) is above average for companies of similar size in the US market ($USD519.76K).

Compensation vs Earnings: Will's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
William Powell
CEO, President & Director4.3yrsUS$1.58m0.24% $187.0k
Ephraim Bird
Senior VP7yrsUS$1.18m0.13% $98.6k
Michael Gray
Senior VP & COO1.8yrsUS$862.18k0.020% $15.6k
Charles Hansen
VP, General Counsel & Secretary4yrsUS$579.10k0.035% $27.2k
Lauri Turjeman
Senior Vice President of Marketing1.8yrsno datano data
Philip Etter
Vice President of Human Resources3.7yrsno datano data

2.9yrs

Average Tenure

51.5yo

Average Age

Experienced Management: SHOS's management team is considered experienced (2.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
William Powell
CEO, President & Director4.3yrsUS$1.58m0.24% $187.0k
Ephraim Bird
Senior VP7yrsUS$1.18m0.13% $98.6k
James Gooch
Independent Director6.6yrsUS$110.00k0.0088% $6.8k
Josephine Linden
Independent Director7yrsUS$110.00k0.0088% $6.8k
Richard Longino
Independent Director3yrsUS$100.00k0.088% $68.0k
Alberto Franco
Independent Director0.5yrsno datano data
John Tober
Independent Director0.5yrsno datano data

4.3yrs

Average Tenure

59yo

Average Age

Experienced Board: SHOS's board of directors are considered experienced (4.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: SHOS insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Sears Hometown and Outlet Stores, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Sears Hometown and Outlet Stores, Inc.
  • Ticker: SHOS
  • Exchange: NasdaqCM
  • Founded:
  • Industry: Home Improvement Retail
  • Sector: Retail
  • Market Cap: US$77.187m
  • Shares outstanding: 22.70m
  • Website: https://www.shos.com

Number of Employees


Location

  • Sears Hometown and Outlet Stores, Inc.
  • 5500 Trillium Boulevard
  • Suite 501
  • Hoffman Estates
  • Illinois
  • 60192
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SHOSNasdaqCM (Nasdaq Capital Market)YesCommon StockUSUSDOct 2012

Biography

Sears Hometown and Outlet Stores, Inc. engages in the retail sale of home appliances, lawn and garden equipment, tools, and hardware in the United States. It operates in two segments, Sears Hometown (Hometown) and Sears Outlet (Outlet). The Hometown segment operates Sears Hometown Stores that offer products and services across a range of merchandise categories, including home appliances, lawn and garden equipment, tools, sporting goods, and household goods; and Sears Hardware Stores, which provide products and services across a range of merchandise categories, such as home appliances, lawn and garden equipment, tools, fasteners, electrical supplies, plumbing supplies, and other home improvement products. It also operates Sears Home Appliance Showrooms that offer home appliances and related services in stores primarily located in strip malls and lifestyle centers of metropolitan areas; and Buddy's Home Furnishing Stores. In addition, this segment operates SearsHometownStores.com, SearsHardwareStores.com, and SearsHomeApplianceShowroom.com domain names. The Outlet segment provides in-store and online access to purchase outlet-value products across an assortment of merchandise categories comprising home appliances, mattresses, apparel, sporting goods, lawn and garden equipment, and tools, as well as other household goods that include furniture. It also sells its products through searsoutlet.com. The company also offers various services, such as home delivery, installation, and extended service plans. As of May 4, 2019, the company, and its independent dealers and franchisees operated a total of 639 stores across 49 states, as well as in Puerto Rico and Bermuda. Sears Hometown and Outlet Stores, Inc. is headquartered in Hoffman Estates, Illinois. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/25 00:15
End of Day Share Price2019/10/23 00:00
Earnings2019/08/03
Annual Earnings2019/02/02


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.