UPDATE 1-Sears' Lampert takes media, Street to task
(New throughout. Adds background, analyst, Lampert comments)
CHICAGO, Nov 30 (Reuters) - Sears Holdings Corp (SHLD.O) Chairman Edward Lampert on Friday took the media and analysts to task for underestimating the company, saying the retailer is being criticized for the same practices that elicit praise when used by its competitors.
"When other companies manage expenses carefully, it is often characterized as a sign of good management and prudence. In the case of Sears Holdings, meanwhile, expense controls are often cited as a root cause of poor performance," he said.
His comments came in a letter to employees that was filed with the U.S. Securities and Exchange Commission one day after the owner of Kmart and Sears, Roebuck posted a 99 percent drop in third-quarter earnings and a 3 percent decline in sales.
"Much of the commentary in the media and on Wall Street following the results ignores the strength of our company and the progress that we have made," Lampert said in the letter.
When other retailers, including J.C. Penney Co Inc (JCP.N) and Home Depot Inc (HD.N) suffered from the economic environment in the past year, commentary on their earnings was different than on Sears' results, he said.
Comments on those retailers has focused "on the difficulties in the housing markets, the overall macro environment, and the highly promotional nature of the retail environment that has existed recently," Lampert said, while commentary on Sears' looked at its expense controls.
But he added: "All of these companies have spent enormous amounts to open new stores and to remodel existing stores, and still ended up with lower earnings. Spending lots of money doesn't always lead to the results people expect."
Some analysts have argued that Sears has focused too much on cost cutting at the expense of store improvements, systems upgrades and other efforts to drive sales and better manage the business.
Sears shares were up $2.63 at $106.78 Friday on the New York stock Exchange, after falling more than 10 percent on Thursday. (Reporting by Brad Dorfman; Editing by Jeffrey Benkoe)
