SHLD: The Incredible Shrinking Shares Outstanding

Sears Holdings (SHLD) released better than expected earnings this morning, and after initially gapping higher, the stock has seen a pretty significant sell off.  However, one of the more notable aspects of this morning's report was the fact that the company continues to buy back stock.  During the latest fiscal year, the company spent over $400 million on stock buybacks, representing approximately 4% of the company's outstanding shares.  While most companies with regular buyback programs use the buybacks to help offset dilution from option expirations, SHLD's buyback goes right to the bottom line and lowers the outstanding share base.  In fact, since mid-2005 when Kmart and Sears merged, the total shares outstanding for the company have declined by nearly 30%.