Retailer Sears, Roebuck and Co reported better-than-expected second quarter results as the strength of its credit and financial business helped it overcome another decline in store sales.

Profits were $420 million, and net earnings amounted to $1.31 per share, compared with a net loss of $197 million, or 60 cents per share, in the second quarter a year ago.

Revenues were $10.14 billion, down from $10.18 billion. Retail sales dropped 0.8 percent to $7.7 billion on weak apparel results despite increased sales of hardline goods, such as home appliances and hardware.

Based on the better-than-expected results, the retailer boosted its outlook estimate for full-year earnings as it prepares to integrate Lands' End, the catalog and online merchant it acquired recently for $1.9 billion. Alan Lacy, chairman and chief executive officer, said the company expects full-year earnings to be about $5.15 a share, 22 per cent higher than 2001 results.

Sears also announced that 184 of its 870 full-line stores will be stocked with Lands' End merchandise by late autumn.