CHICAGO -- Sears, Roebuck and Co. yesterday took another big step toward repairing its tarnished image on Wall Street, reporting a sharp jump in second-quarter profits.
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. Additionally, Sears's 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. "We are generating a lot of the momentum internally."
The gains marked the second successive quarter that Sears had pleasantly surprised investors with the rapid progress it has made 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 lower than the figures Sears reported yesterday.
Sears said its net income in the three months which ended June 30 more than tripled, to $1.01 billion, from $325.5 million in the second quarter of 1992. That 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 quarter's 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.
Revenues rose 5.6 percent for the quarter, to $12.16 billion, from $11.51 billion a year ago.