Sears, Roebuck and Co., the nation's largest retailer and a financial services conglomerate, reported a 5.4 percent drop in its second-quarter earnings Tuesday despite higher revenue for the period.
Sales at Sears stores advanced 7 percent over a year ago, compared with revenue gains of more than 10 percent in each of the company's three other major operating units, Sears said in a statement.Sears reported net income of $369.4 million, or 98 cents per share, for the three months ended June 30, compared with $390.4 million, or $1.03 per share, for the same period a year ago.
Revenue rose 10.8 percent to $12.98 billion from $11.72 billion a year earlier.
The Sears Merchandise Group, which includes the more than 800 Sears department stores, had second-quarter revenue of $7.2 billion, compared with $6.7 billion a year ago.
Income from the stores group rose 10.5 percent to $188.8 million but the results included a gain of $31 million from an accounting change. Excluding that gain, income from the Sears Merchandise Group fell $13 million from the $170.8 million reported for the second quarter of 1987.
In March, Sears announced it was restructuring the management of its merchandising sector to make the unit more profitable and more responsive to changing consumer tastes.
Second-quarter revenue from the Allstate Insurance Group rose 17.5 percent to $4.5 billion while income from the unit fell 17.5 percent to $206.6 million. Sears blamed the income decline on an accounting change and an increase in claims.
The Dean Witter Financial Services Group, which includes the Discover card, had quarterly revenue of $1.05 billion, up 11.2 percent from 1987. Income from the unit fell 51 percent to $15.1 million. Sears said the year-ago income figure of $31 million included a $58 million gain from the sale of Sears Savings Bank branch offices.
Sears reported a $100,000 profit for the Discover credit card operation, marking the second consecutive profitable quarter for the card after two years of losses.
Sears has said it expects the card to break even this year.
The Coldwell Banker Real Estate Group had quarterly revenue of $371.5 million, a 10.2 percent increase. Income from the unit advanced nearly 19 percent to $15.2 million.
For the first six months of 1988, Sears had net income of $548.9 million, or $1.45 per share, down 20 percent from $678.3 million, or $1.78 per share, for the first half of 1987.
First-half revenue totaled $25.14 billion, up 13.3 percent from $22.20 billion for the first six months of 1987.