BTShine

He was definitely joking. And it got a lot of laughs. +1 Yeah, I was there and they both agreed that profits were higher than they had thoughts were sustainable in the past. But, both agreed that profits could stay high, too.

FCharlie, Thanks for laying that out. It looks like SHLD had reduced its inventory by $500 million as of 1/28/12 vs. 1/29/11, so we might be double counting the inventory reduction. That said, there will likely be a lot of cash on hand if we can sell Lands End for $2 Billion or more.

Does anyone think that SHLD isn't doing as poorly as their income statement suggests? Whenever I read the filings, presentations and other information on Sears, there are bits of info related to how SHLD is expensing some investments instead of capitalizing the investments; particularly investments in technology and SYWR. It makes profits look poor in the short term, but in the long term it could pay off. At the shareholders meeting last year the said ShopYourWayRewards hurt margins...I think by 40 bps...while they also mentioned that it's an investment in the company, not just an expense (which I agree with). This holiday season then brought out even more aggressive SYWR promotions...5% discounts at Kmart and 2% at Sears...which could have hurt margins even more than the 40 bps of last year. Maybe combined the SYWR and 5% & 2% discounts hurt margins by 100 bps? What do you all think?

For a comparable, the Stanley Black and Decker Tools division has profit margins of 13%. From the recent 10-K: Segment profit increased $223 million from 2010, inclusive of $20 million in merger and acquisition-related charges. Excluding those charges, 2011 segment profit was $702 million, or 13.4% of net sales, which compares to 2010 segment profit excluding merger and acquisition-related charges of $585 million, or a consistent segment profit rate of 13.4%. Aside from the impact of merger and acquisition-related charges declining by $107 million, segment profit increased in 2011 due to the favorable impact of cost synergies, higher sales volume and continued growth in Latin America. CDIY segment profits in 2011 also reflect the unfavorable impact of unrecovered commodity cost inflation, the impact of promotional spending associated with older generation products (which offset other product list price increases), and the continued impact of the previously discussed Pfister business loss. Also, it shows that Stanley's CDIY, or Tools Division, had sales and profits of $1.258 Billion and $141 million respectively in 2009 (pre-merger; does not include Black and Decker). Profit margins were around 11% for Stanley Tools. You can make your own assumption for Craftsman's revenues, margins, etc. I'd think Craftsman would be worth between $1 and $4 Billion. Google Trends shows that people search for "Craftsman Tools" around 2X more than "Stanley Tools". That could imply that Craftsman Tools has twice the selling potential? That's a huge question. http://www.google.com/trends/?q=craftsman+tools,+stanley+tools&ctab=0&geo=all&data-ipsquote-timestamp=ytd&sort=0

First post here. My apologies if the formatting doesn't work out well. Mevsemt - Agreed, this is big stuff im my opinion. If the sale of Lands' End works out, we will witness the announcement for sale/liquidation of $3 Billion of assets in less than 3 months. That doesn't include the approx. $500 million inventory reduction. 2012 could see a cash influx of $3.5 Billion if Lands' End is sold this year. It boggles my mind as to why the market thinks this is a capital destructive move. But, that's why guys like you use "Me Vs EMT" for a name, and why guys like me think the MeVsEMT name is fantastic.