The struggling retail icon swung to a profit by cutting costs and selling its Craftsman brand of tools. Fred Katayama reports.
Sears shares surging just two months after warning it may not be around. The struggling retailing icon posted its first quarterly profit in nearly two years. But it wasn't due to sales, which continued their years-long decline. It made money by cutting costs and selling its Craftsman tools brand for over half a billion dollars. Sears was once the largest U.S. retailer. But it has been struggling amid rising competition from Wal-Mart, Target and Amazon.com. In March its stock got hammered after it warned about its ability to continue as a "going concern" following years of losses and shrinking sales. Sears' drive to bounce back comes amid a retail wreck. Quarterly same store sales have fallen at traditional chains like Macy's, Kohl's and J.C. Penney. In addition to facing online competition, a potential tax on imported goods could slam retailers. U.S. Bank portfolio manager Eric Wiegand: SOUNDBITE: ERIC WIEGAND, SENIOR PORTFOLIO MANAGER, U.S. BANK, (ENGLISH) SAYING: "Certainly one of the big issues confronting retailers and their stocks as well beyond the actual economic results will be what transpires as far as tax reform is concerned. This whole border adjustment tax can have a profound impact on the retail space." On Thursday, Sears shares catapulted as much as 33 percent - on course for their best one-day gain in more than two years. The retailer has been closing stores and cutting jobs in a bid to cut costs and turn around the company.