Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, July 21, 1993 TAG: 9307210060
SECTION: BUSINESS PAGE: B8 EDITION: METRO
SOURCE: The New York Times
DATELINE: CHICAGO LENGTH: Medium
Sears said the earnings reflected a faster payback than projected on its overhaul of retailing operations, which has included the recruitment of outside senior managers, closing some stores, renovating others and shutting the legendary Sears catalog.
(Sears Telecatalog Center in Roanoke has been kept open to handle customer service calls until the company negotiates a sale of the operation. It quit selling merchandise from the Sears catalog in May.)
Sears also said its Allstate insurance subsidiary performed better than had been expected.
"The economic environment hasn't improved all that much," said Edward A. Brennan, chairman and chief executive of Sears and one of the nation's most visible targets of restive shareholders before the company's drastic restructuring plan was announced last year. "We are generating a lot of the momentum internally."
It was the second successive quarter in which Sears had pleasantly surprised investors with its rapid progress under Arthur C. Martinez, who was recruited last year from Saks Fifth Avenue to oversee the revamping of retailing operations.
"They are starting to catch fire," said Edward A. Weller, a retailing analyst for Robertson, Stephens & Co. in San Francisco. Analysts had been raising estimates for the quarter based on monthly retail reports that showed Sears had fared better than most competitors. Still, their consensus had remained substantially less than the figures Sears reported Tuesday.
Sears said its net income in the three months ended June 30 more than tripled to $1.01 billion, from $325.5 million in the second quarter of 1992. The increase included a number of extraordinary gains and losses, among them a $635.1 million gain on the Allstate public offering in June and $145.3 million in expenses from early retirement of debt.
The figures also included income of more than $122 million from discontinued operations, mainly the interest Sears had in Dean Witter, Discover & Co. after the public offering of the financial services and credit card company's stock in February. The remaining 80.1 percent stake in Dean Witter was spun off to Sears shareholders on June 30.
Revenues rose 5.6 percent to $12.16 billion from $11.51 billion in the 1992 quarter.
Sears also benefited from the success of its public offering of Allstate shares and from Allstate's higher earnings, which lifted Sears' net income from its share of the insurance company 61.9 percent to $371.8 million from $229.6 million a year ago.
by CNB