USA: Sears Reports Record Second Quarter Earnings

Sears, Roebuck and Co's (NYSE: S) retail and credit businesses helped boost second-quarter net income by 29 per cent on a per share basis, the company reported today. Second quarter 2000 net income stands at $388m, or $1.11 per share. This compares favourably with last year's second quarter net income of $331m, or $0.86 per share. Sears' share repurchase programme was also credited for the strong financial performance. In retail, robust hardlines sales and improved selling and administrative expenses resulted in operating income growth of 9.8 per cent over the second quarter of the prior year. Credit operating income increased by 26.3 per cent due to higher revenues, improved portfolio quality, securitization activity, and reductions in selling and administrative expense. Operating income in the company's home services business also improved over 1999. "We continue to benefit from the strength of our retail and credit businesses, which both contributed to strong growth in operating income and record earnings this quarter," said chairman and chief executive officer Arthur C. Martinez. "In our retail business, we posted solid sales growth and lower selling and administrative expenses, while our credit business saw further improvement in portfolio quality and lower operating costs. Our strong cash flow allowed us to repurchase over 10 million shares of Sears stock during the quarter and our return on equity over the last twelve months has expanded to 25.1 per cent." For the first six months of 2000, net income was $623m or $1.76 per share, compared with $477m or $1.24 per share for the first half of last year, an increase of 42 per cent on a per share basis.