                           SEARS, ROEBUCK & CO.

                                10/22/93

             10/21/93 52-Wk-Rng FY/Q  EPS93  EPS94 PE94 NxtQtr LyQtr
Sears, Roebuc   59.00   59-40   12/4   4.25   4.55 13.0   1.24 -0.75


1.           Third-quarter EPS of $1.00 exceeded estimates; merchandise
  earnings were in line with estimates; Allstate beat expectations, and
  corporate expense was lower than anticipated.

2.           Strong merchandising momentum is continuing into October. Sears
Roebuck reported third (September) fiscal quarter earnings per share of $1.00
versus a loss of $2.53 a year ago.  Excluded from these numbers are
nonrecurring items amounting to a loss of $0.12 in fiscal 1992 and a gain of
$0.02 in fiscal 1993.  Earnings improved dramatically at both the Sears
Merchandising Group ($165.1 million, versus a loss of $22.4 million) and at
Allstate ($252.9 million after minority interest, versus a Hurricane Andrew
inflicted loss of $840.2 million).  Analysts have raised their fiscal 1993 and
1994 estimates by $0.30 and $0.45, respectively, to $4.25 and $4.55, reflecting
increases in Allstate estimates, adjustments for Allstate capital gains and
lower corporate expense assumptions. Analysts are increasingly impressed by the
momentum generated by the Sears merchandising group, which has extended into
mid-October.  They estimate that comparable-store sales are currently rising in a
13%-15% range. The following table details third-quarter earnings for fiscal
1993 and 1992:


                           1993           1992
Merchandising
  Domestic                 $40.8        $(112.4)
  Foreign                    1.0          (12.4)
  Credit                  $123.3          102.4
Total                     $165.1         $(22.4)
Allstate
  Prop/Casualty           $259.6        $(864.9)
  Life                      42.4           26.4
  Interest and other       (13.3)           0.0
  Realized gains            27.0           (1.7)
  Minority interest        (62.8)           0.0
Total                     $252.9        $(840.2)
Homart                     $(5.0)         $(6.2)
Corporate                  (17.2)         (70.4)
Net income                $395.8        $(939.2)
Preferred dividend           7.2            7.2
Net for common            $388.6        $(946.4)
EPS                         $1.00         $(2.53)
Average shares             387.5          373.8

MERCHANDISING:  Sales fell 6.3%, but on a pro forma basis (excluding exited
businesses), sales rose 11.5% on a 12% comp-store increase to $6.5 billion.
Despite the introduction of third-party credit cards at Sears, finance charge
revenues rose as a percentage of sales.  The increase reflected both the
successful liquidation of $800 million in discontinued catalog inventory,
combined with a strong sales increase in high-ticket durable categories,
usually bought on credit.  FIFO gross margin expanded 219 basis points (200
basis points on a pro forma basis).  The dramatic gross margin improvement was
helped by a strong sellthrough of high-margin apparel compared with excessive
clearance and problems at the automotive division a year ago.  The expense
ratio fell 219 basis points in the period (160 basis points on a pro forma
basis).  The decline reflected continued stringent cost-reduction efforts,
leveraged by the hefty increase in sales.  Within the merchandising group, both
domestic and foreign operations achieved a strong turnaround from significant
losses incurred a year ago.  Credit income, meanwhile, rose 20.4% to $123.3
million and still constituted 75% of total merchandise earnings in the period.
We expect positive merchandising trends to continue into the fourth quarter and
fiscal 1994, and we have made virtually no changes in our estimates for the
merchandising group of $695 million in fiscal 1993 and $825 million in fiscal
1994.

ALLSTATE engineered a powerful turnaround versus the third quarter of fiscal
1993, when Hurricane Andrew drove losses to $840 million. Benefiting from
unusually low catastrophic losses in this year's relatively benign hurricane
season, Allstate's property and casualty division earned $260 million versus
last year's $865-million loss.  Life insurance operations also registered a
strong gain.  Excluding a one-time writeoff related to obsolete MIS equipment,
the division's earnings rose 61% to $42.4 million, reflecting solid sales
growth of variable annuities. Allstate also reported an increase in capital
gains in the period. Allstate estimates have been to $1.3 billion this year and
$1.4 billion in fiscal 1994.  Note, however, that after the deduction of
minority interests for a full year in fiscal 1994, Sears share in earnings from
Allstate will actually decline slightly year over year.  In addition to raising
Allstate estimates, assumptions for corporate expense have been reduced by $48
million this year and $42 million in fiscal 1994.  This reflects the paydown of
corporate debt with proceeds received from the Allstate and Dean Witter
offerings, as well as improved results at the Sears-IBM Prodigy joint-venture.
