Sears Holdings Corp reported a quarterly loss this morning. But the thing that left analysts like Credit Suisse’s Gary Balter scratching their heads was the company’s expectations for higher earnings before interest, taxes, depreciation and amortization (EBITDA) for the full year.

“We are struggling with what we are missing in the context of Q1 being down over $385 million in EBITDA and other comments in the release that talk about the expected difficult sales and gross margin environment,” Balter said in his research note.

Sears said sales fell about 6 percent to $11.1 billion in the quarter. Total U.S. same-store sales were down 8.6 percent as the appliance, lawn, garden and apparel segments languished.

Balter described the second half of the past year for Sears as an “unmitigated disaster” with very high inventories, and expenses that pointed to sales levels that were not reached.

Noting that Sears was already a lean company, Balter said that its latest EBITDA plans implied expense declines of  over 14 percent — which to him, doesn’t seem a viable option unless, he said,  ”the company is planning for even lower service levels and liquidating the company.”

For the quarter, Sears said selling and administrative costs rose 6 percent. The Illinois-based retailer, which has reorganized into five types of business units, and has boosted spending in some areas.

The other alternative to achieve higher EBITDA, Balter said, could include gains on asset sales which he didn’t think would solve Sears’ longer-term issues.

And Sears didn’t seem to be helping him understand any of this  — Balter said in his note that ”there is no one at the company to contact.”

Can someone at Sears, please…?

(Photo: Reuters)

Late Monday, Target said it would sell a 47 percent interest in its credit card business to JPMorgan Chase for an initial investment of $3.6 billion.

The news came almost 8 months after the discount retailer, under pressure from activist investor Bill Ackman, said it was exploring options for its credit card business — a move it had long resisted.

The final deal was a complicated one that Uta Werner, an retail analyst with Sanford C. Bernstein & Co, described in the following way: A “note sold to JPM, backed by a 47 percent undivided interest in Target’s receivables, in exchange for cash proceeds of approximately $3.6 billion and subject to a profit and risk sharing agreement.”

While the deal may have left some on Wall Street scratching their heads, wondering if the deal made sense, CFO Doug Scovanner could not say enough good things about the deal on a conference call on Tuesday.

“We expect to get hundreds of millions of dollars from profit from this venture unless we really screw it up,” he said. “Personally, I think this is what Dire Straits had in mind in the 1980s anthem, ‘Money for Nothing.’ I think this is wonderful.” 

And he balked at the notion of terminating the deal with JPMorgan if Target finds another partner interested in its full credit card portfolio. 

“We just announced that we’re intending to get married in a few weeks and you’re asking me what happens if I want to get divorced,” he said. “I’d far rather live for the moment with the happy ideas of what’s going to happen on this honeymoon than worry about how to unwind this deal.”