SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 18, 1996
SEARS, ROEBUCK AND CO.
(Exact name of registrant as specified in charter)
New York 1-416 36-1750680
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
3333 Beverly Road, Hoffman Estates, Illinois 60179
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 286-2500
<PAGE>
Item 5. Other Events.
On July 18, 1996, the Registrant issued its second quarter earnings
press release attached hereto as Exhibit 99.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
99. The Exhibit Index on page E-1 is incorporated herein by reference.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
SEARS, ROEBUCK AND CO.
Date: July 18, 1996 By: /S/MICHAEL D. LEVIN
MICHAEL D. LEVIN
Senior Vice President,
General Counsel and
Secretary
<PAGE>
EXHIBIT INDEX
Exhibit No.
99. Sears Roebuck and Co. press release dated July 18, 1996.
E-1
CONTACT
William H. Parke
(847) 286-5998
FOR IMMEDIATE RELEASE
July 18, 1996
SEARS ACHIEVES RECORD EARNINGS IN SECOND QUARTER;
INCOME FROM CONTINUING OPERATIONS UP 26 PERCENT
HOFFMAN ESTATES, ILL. -- Sears, Roebuck and Co. today reported
that second-quarter 1996 income from continuing operations
jumped 26.0 percent to a record $274 million, or $0.67 per
common share, from $218 million, or $0.54 per common share, in
the second quarter of 1995.
First-half 1996 income from continuing operations rose 24.4
percent to $425 million, or $1.03 per common share, from $342
million, or $0.84 per common share, in the first half of 1995.
Revenues in the second quarter of 1996 were $9.13 billion, up
11.0 percent over revenues of $8.23 billion in the second
quarter of 1995. Revenues for the first half were $17.13
billion, a 9.2 percent increase over revenues of $15.69 billion
in the same period a year ago.
"As a result of excellent performance in merchandising
operations and strong credit results, we were able to achieve
record second-quarter earnings," said Sears Chairman and Chief
Executive Officer Arthur C. Martinez. "Sales were strong
throughout our mall-based department stores and off-the-mall
specialty stores in both the quarter and year-to-date periods."
- - more -
<PAGE>
Page 2
Domestic operations strong; comparable store sales up 9.4
percent for quarter
Income from domestic operations for the second quarter of 1996
was $288 million, a 31.4 percent increase from $220 million in the
second quarter of 1995. For the first half, domestic operations
income rose 26.6 percent to $453 million, from $358 million in
1995.
"Mall-store revenues rose more than 11 percent in the quarter,
with sales increases across all hardlines and softlines
categories," Martinez said. "Brand Central's performance
exceeded expectations, largely on the strength of our appliance
business. Within softlines, all apparel categories achieved
significant increases." He added that off-the-mall HomeLife
furniture, Sears Hardware and Sears dealer stores experienced
double-digit comparable store sales growth in the quarter, and
that new auto parts stores and increased tire sales contributed
to strong revenue performance by automotive.
Second-quarter 1996 revenues for domestic operations were $8.36
billion, a 12.3 percent increase over revenues of $7.44 billion
in the 1995 period. The improvement was driven by a
comparable-store sales increase of 9.4 percent for the quarter.
First-half revenues for domestic operations were $15.64 billion,
up 10.2 percent over revenues of $14.20 billion for first-half
1995.
Improvement in gross margins and expenses
Domestic gross margins as a percent of merchandising sales and
service in the second quarter increased to 26.4 percent from
25.8 percent in the comparable 1995 period. Domestic operations
selling and administrative expense as a percent of revenues
improved to 21.3 percent in the second quarter from 21.8 percent
in the comparable 1995 period.
- - more -
<PAGE>
Page 3
"Thanks to the dedicated efforts of our associates and
continued emphasis on cost control and margin management, we
were able to convert top-line growth into very strong earnings
growth," Martinez said.
Merchandise sales growth benefits credit; international business down
Domestic credit operations continued to perform well in the
second quarter as a result of strong merchandise sales growth
and the positive impact of uniform pricing and reduced funding
rates. These improvements were partially offset by an increase
in the provision for uncollectible accounts to $254 million from
$147 million in the second quarter of 1995.
"Our credit business experienced strong growth during the
quarter and continued to perform well," Martinez said. "While
we experienced increased write-offs reflecting the
higher levels of personal bankruptcies, they were more than
offset by improved net interest margin.
International operations, which consist of merchandising and
credit operations in Canada and Mexico, posted a second-quarter
1996 net loss of $14 million, compared with a loss of $2 million
in the 1995 period. For the first half of 1996, international
operations had a loss of $28 million, compared with a loss of
$16 million in the first half of 1995, as both Canada and Mexico
continue to suffer from weak economic conditions and competitive
pressures.
Second-quarter 1995 net income, which included the discontinued
operations of Allstate Insurance Group and Homart Development
Co., was $559 million, or $1.41 per common share. First-half
1995 net income, including discontinued operations, was $1.12
billion, or $2.82 per common share.
- - more -
<PAGE>
Page 4
Sears distributed its 80.3 percent ownership in Allstate to
Sears common shareholders on June 30, 1995, through a tax-free
dividend. Sears also completed the divestiture of Homart in
December 1995, which did not result in a gain or loss for the
company.
Through its network of more than 800 mall-based department
stores and 1,500 off-the-mall stores, Sears is a leading
retailer of apparel, home and automotive products and services
for families throughout North America, serving more than 50
million households.
# # # #
WHP/07/17/96/ER2Q966:00pm
<PAGE>
<TABLE>
SEARS, ROEBUCK AND CO.
CONSOLIDATED INCOME
<CAPTION>
Three Months Ended Six Months Ended
June 29, July 1, Percent June 29, July 1, Percent
(millions, except per common share data) 1996 1995* Change 1996 1995* Change
<S> <C> <C> <C> <C> <C> <C>
Revenues
Merchandise sales and services $ 8,056 $ 7,303 10.3 $ 14,964 $ 13,839 8.1
Credit revenues 1,076 923 16.5 2,163 1,850 16.9
Total revenues 9,132 8,226 11.0 17,127 15,689 9.2
Costs and expenses
Cost of sales, buying and occupancy 5,946 5,428 9.5 11,195 10,402 7.6
Selling and administrative 1,976 1,812 9.1 3,726 3,440 8.3
Depreciation and amortization 171 139 22.7 329 277 19.0
Provision for uncollectible accounts 270 156 73.3 508 334 51.9
Interest 333 346 (3.8) 687 682 0.7
Total costs and expenses 8,696 7,881 10.3 16,445 15,135 8.6
Operating income 436 345 26.6 682 554 23.2
Other income 23 15 44.0 27 11 -
Income before income taxes 459 360 27.4 709 565 25.4
Income taxes 185 142 29.6 284 223 26.8
Income from continuing operations 274 218 26.0 425 342 24.4
Income from discontinued operations,
net of income taxes - 341 - - 776 -
Net income $ 274 $ 559 (51.0) $ 425 $ 1,118 (62.0)
Income from continuing operations consists of:
Domestic operations $ 288 $ 220 31.4 $ 453 $ 358 26.6
International operations (14) (2) - (28) (16) -
Income from continuing operations $ 274 $ 218 26.0 $ 425 $ 342 24.4
Earnings per common share, after
allowing for dividends on preferred shares:
Income from continuing operations $ 0.67 $ 0.54 $ 1.03 $ 0.84
Discontinued operations - 0.87 - 1.98
Net income $ 0.67 $ 1.41 $ 1.03 $ 2.82
Average common and common
equivalent shares outstanding 400.1 392.5 399.8 391.2
<FN>
* Certain reclassifications have been made to 1995 balances to conform with
current year presentation.
</FN>
</TABLE>
<PAGE>
<TABLE>
SEARS, ROEBUCK AND CO.
SUPPLEMENTARY DOMESTIC OPERATIONS INFORMATION
<CAPTION>
Three Months Ended Six Months Ended
June 29, July 1, June 29, July 1,
(millions, except number of stores) 1996 1995* 1996 1995*
<S> <C> <C> <C> <C>
Revenues
Domestic merchandising sales
and services $ 7,359 $ 6,610 $ 13,647 $ 12,527
Domestic credit revenues 996 829 1,995 1,668
Total revenue 8,355 7,439 15,642 14,195
Cost and Expenses
Cost of sales, buying and occupancy 5,414 4,903 10,166 9,386
Selling and administrative 1,784 1,624 3,372 3,091
Depreciation and amortization 154 121 296 245
Provision for uncollectible accounts 254 147 481 315
Interest 288 295 595 585
Total costs and expenses 7,894 7,090 14,910 13,622
Operating income - Domestic operations $ 461 $ 349 $ 732 $ 573
Comparable store sales increase 9.4% 3.2% 7.1% 3.7%
Gross margin ratio 26.4% 25.8% 25.5% 25.1%
Selling and administrative expense ratio 21.4% 21.8% 21.6% 21.8%
Pretax LIFO charge $ 24 $ 18
Domestic inventories - FIFO $ 4,741 $ 4,504
- LIFO $ 4,005 $ 3,794
<CAPTION>
Dec 30, 1995 Opened Closed/Sold Jun 29, 1996
<C> <C> <C> <C>
Domestic merchandising stores:
Large sized 425 6 - 431
Medium sized 372 - (3) 369
Small hard line 9 - (1) 8
Total mall stores 806 6 (4) 808
Off-the-mall stores 1,500 97 (47) 1,550
Gross Square Feet:
December 30, 1995 133.5
Opened 2.7
Closed (0.9)
June 29, 1996 135.3
<CAPTION>
Three Months Ended Six Months Ended
June 29, July 1, June 29, July 1,
1996 1995* 1996 1995*
<C> <C> <C> <C>
Domestic credit revenues:
Gross finance charges and other revenues $ 1,080 $ 912 $ 2,157 $ 1,836
Funding cost on securitized receivables (84) (83) (162) (168)
Total $ 996 $ 829 $ 1,995 $ 1,668
<FN>
* Certain reclassifications have been made to 1995 balances to conform with current year presentation.
</FN>
</TABLE>
