Sears Profit Jumps 25% in Quarter

Sears, Roebuck, the nation’s largest retailer, on Tuesday reported a 25.1% gain in third-quarter profits over a year ago, partly because of reduced pension expenses.

Sears said its net income for the three months ended Sept. 30 came to $328.1 million, compared to $262.2 million in the same period a year ago.

Revenue rose 11.2% to $11.17 billion from $10.04 billion.

Edward A. Brennan, chairman and chief executive of the Chicago-based retailer, said the quarter’s net income benefited by $33.3 million in reduced pension expense, principally in the company’s merchandise group. The reduction stems, in part, from an accounting rule change.

The merchandise group’s net income edged up 1.9% to $170 million from $166.9 million.

Higher sales, stabilized margins and a slight improvement in selling and administrative expenses helped, Sears said.

“Sales of housing-related merchandise have been particularly strong as a result of the high level of home sales,” Brennan said.

Christmas sales should be “reasonably good,” Brennan said, because of the increased employment and higher discretionary income.

Net income from the Allstate Insurance Group shot up 55.9% to $200.9 million from $128.9 million.

Brennan cited a number of factors, including improved underwriting results and capital gains as well as lower than normal weather-related losses.

Sears’ Dean Witter financial services group reported a third-quarter loss of $8 million, compared to net income of $7 million a year ago.

The company had an after-tax loss of $28.4 million from the national introduction of its Discover credit card, which Sears said was in line with previous estimates.