UNITED STATES
		    SECURITIES AND EXCHANGE COMMISSION
			  Washington, D.C. 20549
			   

			       FORM 10-Q


	    X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
		     THE SECURITIES EXCHANGE ACT OF 1934
	       FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 28, 1996

				 OR

	       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
		     THE SECURITIES EXCHANGE ACT OF 1934
		    
			Commission file number 1-416

						
			   SEARS, ROEBUCK AND CO.
	    (Exact name of registrant as specified in its charter)
     

	    New York                                 36-1750680
     (State of Incorporation)             (I.R.S. Employer Identification No.)


    3333 Beverly Road, Hoffman Estates, Illinois                60179
      (Address of principal executive offices)               (Zip Code)
						      

      Registrant's telephone number, including area code: 847/286-2500
								      

   Registrant (1) has filed all reports required to be filed by Section 13 
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 
months and (2) has been subject to such filing requirements for the past 
90 days.
	     
		    Yes    X                No       

	   
   As of October 31, 1996 the Registrant had 391,520,604 common shares, 
$.75 par value, outstanding.

							      
<PAGE>                                                              
				  


		       Sears, Roebuck and Co.
	       Index to Quarterly Report on Form 10-Q
			September 28, 1996

									 Page

Part I  -  Financial Information.                               
								      
     Item 1. Financial Statements.

	     Condensed Consolidated Statements of Income (unaudited) -   
	     Three and Nine Months Ended September 28, 1996 and
	     September 30, 1995.                                          1

	     Condensed Consolidated Balance Sheets - 
	     September 28, 1996 (unaudited), September 30, 1995 
	     (unaudited) and December 30, 1995.                           2
	    
	     Condensed Consolidated Statements of Cash Flows 
	     (unaudited) - Nine Months Ended September 28, 1996 
	     and September 30, 1995.                                      3
				
	     Notes to Condensed Consolidated Financial Statements
	     (unaudited).                                                 4

	     Independent Certified Public Accountants' Review Report.     6

     
     Item 2. Management's Discussion and Analysis of
	     Financial Condition and Results of Operations.               7


Part II -  Other Information.

     Item 6. Exhibits and Reports on Form 8-K.                            11



<PAGE>


				    -1-

<TABLE>
		       PART I. FINANCIAL INFORMATION
			ITEM I. FINANCIAL STATEMENTS
			   SEARS, ROEBUCK AND CO.
	       CONDENSED CONSOLIDATED STATEMENTS OF INCOME
			       (Unaudited)
<CAPTION>

					   Three Months Ended         Nine Months Ended
					  Sept. 28,   Sept. 30,     Sept. 28,    Sept. 30, 
(millions, except per common share data)    1996        1995          1996         1995  
<S>                                       <C>         <C>             <C>          <C>

Revenues                                                         
  Merchandise sales and services          $  7,965    $  7,491      $ 22,929     $ 21,330 
  Credit revenues                            1,102         949         3,265        2,799  
    Total revenues                           9,067       8,440        26,194       24,129 
  
Costs and expenses                                                       
  Cost of sales, buying and occupancy        5,903       5,585        17,098       15,987     
  Selling and administrative                 1,933       1,809         5,659        5,249 
  Depreciation and amortization                173         143           502          420 
  Provision for uncollectible accounts         286         187           794          521 
  Interest                                     326         342         1,013        1,024  
    Total costs and expenses                 8,621       8,066        25,066       23,201  

Operating income                               446         374         1,128          928 
Other income                                    17           9            44           20  
Income before income taxes                     463         383         1,172          948 
Income taxes                                   184         155           468          378   
Income from continuing operations              279         228           704          570 
Income from discontinued operations, less                                             
 income tax expense of $249                     -           -             -           776  

Net income                                $    279    $    228      $    704     $  1,346  

Income from continuing operations 
consists of:                                                   
  Domestic operations                     $    292    $    235      $    745     $    593  
  International operations                     (13)         (7)          (41)         (23) 
Income from continuing operations         $    279    $    228      $    704     $    570  

Earnings per common share:                                                       
  Income from continuing operations, 
    after allowing for dividends on 
    preferred shares                      $    0.68   $    0.56     $    1.71    $    1.40  
  Discontinued operations                        -           -             -          1.98  
    Net income                            $    0.68   $    0.56     $    1.71    $    3.38  

Cash dividends declared per common share  $    0.23   $    0.23     $    0.69    $    1.03  

Average common and common                                                        
  equivalent shares outstanding               398.4       396.0         399.3        392.8 

<FN>                                                        
See accompanying notes.                                                          
</FN>
</TABLE>                                                        

							
<PAGE>


				   -2-
<TABLE>                                   
			  SEARS, ROEBUCK AND CO.
		  CONDENSED CONSOLIDATED BALANCE SHEETS

<CAPTION>
					       (Unaudited)
					Sept. 28,         Sept. 30,          Dec. 30, 
(millions)                                1996               1995               1995    
<S>                                     <C>                <C>                <C>
Assets                                   
 Current assets                                        
  Cash and invested cash                $    649           $    469          $    606 
  Credit card receivables                 20,189             18,328            20,106 
  Other receivables                          358                229               444 
  Merchandise inventories                  5,260              4,840             4,033 
  Prepaid expenses and deferred charges      386                405               360 
  Deferred income taxes                      981              1,065               892 
    Total current assets                  27,823             25,336            26,441 

Property and equipment                                        
  Land                                       406                372               387 
  Buildings and improvements               4,776              4,264             4,382 
  Furniture, fixtures and equipment        4,051              4,139             3,775 
  Capitalized leases                         369                237               313  

					   9,602              9,012             8,857 
   Less accumulated depreciation           4,095              4,364             3,780  
    Total property and equipment, net      5,507              4,648             5,077 
 Deferred income taxes                       797                608               879 
 Other assets (note 4)                       993                809               733 
 Net assets of discontinued operations        -                 472                -    
   Total assets                         $ 35,120           $ 31,873          $ 33,130  

Liabilities                                      
  Current liabilities                                   
   Short-term borrowings                $  4,741           $  5,843          $  5,349 
   Current portion of long-term 
     debt and capitalized leases           2,298              1,491             1,730 
   Accounts payable and other 
     liabilities                           6,997              6,223             6,641 
   Unearned revenues                         945                835               887  
      Total current liabilities           14,981             14,392            14,607 

  Long-term debt and capitalized leases   11,355              9,434            10,044 
  Postretirement benefits                  2,802              2,822             2,825 
  Minority interest and other liabilities  1,195                924             1,269  
     Total liabilities                    30,333             27,572            28,745 

Shareholders' Equity                                     
  8.88% Preferred Shares, First
    Series (note 2)                          325                325               325 
  Common shares                              323                322               322 
  Capital in excess of par value           3,621              3,626             3,634 
  Retained income (note 2)                 2,856              2,086             2,444 
  Treasury stock - at cost                (1,653)            (1,648)           (1,634) 
  Minimum pension liability                 (285)                -               (285) 
  Deferred ESOP expense                     (232)              (257)             (253) 
  Cumulative translation adjustments        (168)              (153)             (168) 
     Total shareholders' equity            4,787              4,301             4,385  

     Total liabilities and
       shareholders' equity             $ 35,120           $ 31,873          $ 33,130  
     
     Total common shares outstanding       391.4              389.7             390.5 
<FN>
See accompanying notes.                                          
</FN>
</TABLE>
<PAGE>


				    -3-
<TABLE>                                    

			    SEARS, ROEBUCK AND CO.
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
				(Unaudited)
<CAPTION>
								Nine Months Ended                     
							   Sept. 28,          Sept. 30,
(millions)                                                   1996               1995 
<S>                                                        <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                    

Net income                                                 $    704           $  1,346   
Adjustments to reconcile net income to net cash                          
  provided by (used in) operating activities:                    
    Depreciation, amortization and other noncash items          689                511 
    Provision for uncollectible accounts                        794                521 
    Gain on sales of property and investments                   (34)               (11) 
    Change in:                                                                      
      Deferred income taxes                                     (16)               (53) 
      Credit card receivables                                  (941)              (725) 
      Merchandise inventories                                (1,084)              (794) 
      Other operating assets                                      3                 (3) 
      Operating liabilities                                     222                524 
  Discontinued operations                                        -                (776)  
       Net cash provided by operating activities                337                540 

CASH FLOWS FROM INVESTING ACTIVITIES:                    

Acquisition of business, net of cash acquired                  (296)                - 
Proceeds from sales of property and investments                  37                 11 
Purchases of property and equipment                            (830)              (804) 
Discontinued operations - net                                    -                (310)  
    Net cash used in investing activities                    (1,089)            (1,103) 

CASH FLOWS FROM FINANCING ACTIVITIES:                    

Proceeds from long-term debt                                  3,137              1,714 
Repayments of long-term debt                                 (1,433)              (836) 
Decrease in short-term borrowings,
  primarily 90 days or less                                    (611)              (327) 
Repayment of ESOP note receivable                                21                372 
Common shares purchased for employee stock plans               (139)                - 
Common shares issued for employee stock plans                   112                 74 
Dividends paid to shareholders                                 (292)              (510) 
   Net cash provided by financing activities                    795                487 

Effect of exchange rate changes on cash and invested cash        -                  (3) 

Net increase (decrease) in cash and invested cash                43                (79) 

Cash and invested cash at beginning of year                     606                548  

Cash and invested cash at September 28, 1996 &
  September 30, 1995                                       $    649           $    469

<FN>
See accompanying notes.                          
</FN>
</TABLE>
<PAGE>
      

				    -4-


			    
			   SEARS, ROEBUCK AND CO.
	    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	   
     

1. Condensed Consolidated Financial Statements 
   
    The Condensed Consolidated Balance Sheets as of September 28,1996 and
September 30, 1995 and the related Condensed Consolidated Statements of
Income for the three and nine months then ended and Condensed Consolidated
Statements of Cash Flows for the nine months then ended are unaudited.  The
interim financial statements reflect all adjustments (consisting only of
normal recurring accruals) which are, in the opinion of management, necessary 
for a fair statement of the results for the interim periods presented.  The
condensed consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes thereto included in
the Sears, Roebuck and Co. 1995 Annual Report to Shareholders and Annual
Report on Form 10-K.  The results of operations for the interim periods
should not be considered indicative of results to be expected for the full 
year.

    Earnings per common share is computed based on the weighted average number
of common and common equivalent shares (dilutive stock options) outstanding
and after adjustment for dividends of $7 million and $22 million for the
three- and nine-month periods ended September 28, 1996 and September 30, 1995,
respectively, on the 8.88% Preferred Shares.
	
    Certain reclassifications have been made in the 1995 financial statements
to conform with current year presentation. 


2. Shareholders' Equity and Dividend Restrictions
    
    Under terms of indentures entered into in 1981 and thereafter, Sears
cannot take specified actions, including the declaration of cash dividends,
which would cause its consolidated unencumbered assets, as defined, to fall
below 150% of its consolidated liabilities, as defined.  At September 28,
1996, approximately $1.9 billion could be paid in dividends to shareholders
under the most restrictive indentures.  
    
    On March 13, 1996, the Board of Directors approved a common share
repurchase program for the purpose of acquiring shares for distribution under
employee stock-based incentive plans.  The Company plans on acquiring up to
10 million Sears common shares on the open market over the next two years.
Through September 28, 1996, 2.9 million common shares had been acquired under
the repurchase program.
    
    On September 23, 1996, the Company announced its intention to redeem 
at par all the outstanding 8.88% Preferred Shares, First Series on 
November 12, 1996.


3. Discontinued Operations 
    
    On November 10, 1994, the Company announced its intention to distribute
in a tax-free dividend to the Company's common shareholders its 80.3%
ownership interest in The Allstate Corporation.  The distribution was
approved by shareholders at a special meeting on March 31, 1995.  On June 20,
1995, the Company's Board of Directors approved the distribution to Sears
shareholders in a tax-free dividend.  Sears shareholders of record on June 30,
1995 received, effective June 30, 1995, .927035 share of The Allstate
Corporation for each Sears common share.  This transaction resulted in
a non-cash dividend to Sears shareholders totaling $8.98 billion.
				   
    In conjunction with the Allstate spin-off, The Savings and Profit Sharing
Fund of Sears Employees, which includes an Employee Stock Ownership Plan (the
ESOP), was split into two different plans, a plan for employees of the
Company and its affiliates other than Allstate and a plan for Allstate 
employees.  The ESOP was split with 50% of the unallocated shares in the ESOP
and 50% of the ESOP debt being transferred to the Allstate plan.  In
connection with this transfer, Allstate purchased from the Company 50% of the
Company's remaining loan to the ESOP at a purchase price of $327 million.



<PAGE>

				   -5-
 

			 SEARS, ROEBUCK AND CO.
	     NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
		

    In July 1995, the Company completed the sale of Homart's commercial
office building portfolio to an operating partnership composed of The Morgan
Stanley Real Estate Fund II, L.P. and Hines Interests Limited Partnership.
In December 1995, the Company completed the sale of the retail shopping 
center and community development businesses of Homart to a wholly-owned
subsidiary of General Growth Properties, Inc.  No gain or loss to the Company
resulted from these transactions.


4. Orchard Supply Hardware Stores Corporation Acquisition
   
    During September 1996, the Company acquired the outstanding stock of
Orchard Supply Hardware Stores Corporation ("Orchard") for $309 million.
Orchard is a retail corporation engaged in the operation of 61 hardware
superstores in California.  The acquisition was recorded using the purchase
method of accounting and resulted in goodwill of approximately $220 million,
which is included in other assets.  Orchard's results of operations after
the date of acquisition are not material to the Company's consolidated
results of operations.
 

5. Legal Proceedings
   
    Various legal and governmental proceedings are pending against the
Company, many involving routine litigation incidental to the businesses.
Other matters contain allegations which are nonroutine and involve
compensatory, punitive or antitrust treble damage claims in very large
amounts, as well as other types of relief. 

    The consequences of these matters are not presently determinable but, in
the opinion of management of the Company after consulting with legal counsel,
the ultimate liability in excess of reserves currently recorded is not
expected to have a material effect on the results of operations, financial
position, liquidity or capital resources of the Company.


	
<PAGE>


				    -6-


				    
			  SEARS, ROEBUCK AND CO.
			
	    INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REVIEW REPORT
	    

To the Shareholders and Board of Directors
   of Sears, Roebuck and Co.

We have reviewed the accompanying Condensed Consolidated Balance Sheets of
Sears, Roebuck and Co. as of September 28, 1996 and September 30, 1995, and
the related Condensed Consolidated Statements of Income for the three and
nine-month periods ended September 28, 1996 and September 30, 1995, and the
Condensed Consolidated Statements of Cash Flows for the nine-month periods
ended September 28, 1996 and September 30, 1995.  These financial statements
are the responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants.  A review of interim
financial information consists principally of applying analytical procedures
to financial data and of making inquiries of persons responsible for
financial and accounting matters.  It is substantially less in scope than
an audit conducted in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that
should be made to such condensed consolidated financial statements for them
to be in conformity with generally accepted accounting principles.

We have previously audited, in accordance with generally accepted auditing
standards, the Consolidated Balance Sheet of Sears, Roebuck and Co. as of
December 30, 1995, and the related Consolidated Statements of Income,
Shareholders' Equity, and Cash Flows for the year then ended (not presented
herein); and in our report dated February 15, 1996, we expressed an 
unqualified opinion on those consolidated financial statements.  In our
opinion, the information set forth in the accompanying Condensed Consolidated
Balance Sheet as of December 30, 1995, is fairly stated, in all material
respects, in relation to the Consolidated Balance Sheet from which it has
been derived.


Deloitte & Touche LLP


Chicago, Illinois
November 8, 1996
<PAGE>



				    -7- 
				    


		   ITEM 2. - SEARS, ROEBUCK AND CO.
	     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
		 CONDITION AND RESULTS OF OPERATIONS
THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 28, 1996 AND SEPTEMBER 30, 1995


Operating Results

    Revenues increased 7.4% to $9.1 billion and 8.6% to $26.2 billion for
the three- and nine-month periods ended September 28, 1996, respectively,
from the comparable 1995 periods. Revenues are generated from domestic
operations and international operations.  Domestic operations include 
department stores, off-the-mall stores (comprised of Home stores and
Automotive stores), Home Services, Direct Response and Credit.  Credit
primarily relates to the Sears Card, the largest proprietary credit card
in the United States.  The domestic operations conduct business in the
United States and Puerto Rico.  International operations consist of similar
merchandising and credit operations conducted in Canada through Sears Canada
Inc., a consolidated, 61.1% owned subsidiary ("Sears Canada"), and in Mexico
through Sears Roebuck de Mexico, S.A. de C.V., a consolidated, 75.4% owned
subsidiary ("Sears Mexico").
<TABLE>
Revenues                                 Three Months Ended             Nine Months Ended                           
<CAPTION>                                      
				      Sept. 28,   Sept. 30,           Sept. 28,   Sept. 30,        
(millions, except number of stores)     1996        1995     Change     1996        1995     Change 
<S>                                   <C>         <C>        <C>       <C>         <C>        <C>
Domestic operations:
  Department stores                   $  4,955    $  4,666    6.2%    $ 14,370    $ 13,370    7.5% 
  Off-the-mall stores                    1,581       1,404   12.6        4,480       3,910   14.6
  Service and other revenues               722         713    1.3        2,055       2,030    1.2
  Merchandise sales and services         7,258       6,783    7.0       20,905      19,310    8.3
  Credit revenues                        1,026         863   19.0        3,021       2,531   19.4
Total domestic operations                8,284       7,646    8.4       23,926      21,841    9.5
International operations                   783         794   (1.4)       2,268       2,288    (.9)
  Total revenues                      $  9,067    $  8,440    7.4%    $ 26,194      24,129    8.6%

Domestic comparable store 
    sales increase                        3.8%        5.4%                5.9%        4.3% 

Number of domestic department stores                                       812         804
Number of domestic off-the-mall stores                                   1,653       1,255
  Total                                                                  2,465       2,059
</TABLE>
					     

    Department store revenues increased 6.2% for the third quarter, as the
Company posted strong comparable store sales increases despite the
competitive retail industry environment.

    . Apparel revenues gained 12.7% during the third quarter reflecting the
      positive response to department store renovations, broader assortments
      and quality brands.  Women's ready to wear, especially sportswear,
      men's apparel, and footwear posted strong sales increases.  Apparel
      posted comparable store sales increases in all departments.

    . Hardlines merchandise revenues increased 3.2% for the third quarter
      and were driven by strong home improvement sales, which were up 7.7%
      for the third quarter, partially offset by Brand Central sales which
      were flat to last year.  Hardlines comparable store sales were flat to
      third quarter 1995.
      
    For the nine-month period, department store sales grew 7.5% over 1995 as
Apparel achieved a 12.0% increase and Hardlines gained 5.8%.

<PAGE>


				    -8-



			  ITEM 2. - SEARS, ROEBUCK AND CO.
		MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
			CONDITION AND RESULTS OF OPERATIONS
THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 28, 1996 AND SEPTEMBER 30, 1995


    Off-the-mall store revenues increased 12.6% for the third quarter, which
came on top of a 14.5% gain in 1995. 
				     
    . Home store revenues increased over 1995 led by mid-teen comparable
      store sales growth for Sears Hardware stores.  HomeLife furniture and
      Sears dealer stores comparable sales performance for the third quarter
      improved slightly from 1995.  Home store revenues also benefited from
      180 net new store openings since the  third quarter of 1995.
			 
    . Automotive stores, consisting of the Sears Tire Group and Parts Group,
      also experienced significant revenue growth driven by strong tire and
      battery sales at the Sears Tire Group and the expansion of the Parts 
      Group, which has added over 200 stores since the third quarter of 1995.

    Off-the-mall store revenues increased 14.6% for the nine-month period as
compared to 1995 and benefited largely from the expansion of Home stores and
Automotive stores.
		  
    Service and other revenues, which are generated by the home services and
direct response businesses, were up 1.3% in the third quarter and 1.2% in the
first nine months of 1996 versus the 1995 comparable periods primarily due to
increased memberships and higher retention rates within the direct response 
business.

    The approximate 19.0% growth in domestic credit revenues for the three- 
and nine- month periods reflected higher owned receivable balances resulting
from strong merchandise sales and the positive impact of uniform pricing.
The improvement in credit revenues, coupled with reduced funding rates,
improved the net interest margin.  The Sears Card continues to have the 
dominant market share of credit retail sales generated in both the department
stores and off-the-mall stores.

    International revenues for the third quarter of 1996 fell 1.4% from the
same period a year ago.  Revenues were flat at Sears Canada and declined at
Sears Mexico reflecting the difficult local economic conditions and
competitive pressures.  For the nine-month period, International revenues
were $2.3 billion, down $20 million from the prior year.

    Gross margin as a percentage of domestic merchandise sales and services
for the third quarter was 26.1% versus 25.6% in the comparable prior year
period.  The domestic gross margin rate benefited from a shift in sales to
higher margin apparel merchandise, improved logistics costs and savings from
strategic sourcing initiatives.  For the nine-month period, 1996 domestic 
gross margins rose 40 basis points to 25.7%.  International gross margins
decreased to 23.5% in the third quarter from 23.6% n 1995.  For the nine-
month period, International gross margins fell 50 basis points to 22.5%.

    Selling and administrative expense as a percentage of revenues for
domestic operations decreased to 20.9% in the third quarter of 1996 from
21.2% resulting from the strong revenue performance coupled with continued
emphasis on controlling expenses and leveraging the fixed cost base.  For
the nine-month period, the selling and administrative rate for domestic
operations improved 30 basis points to 21.3%.  International selling and 
administrative expenses increased to 25.7% from 24.0% in the third quarter
due to restructuring charges recorded for Sears Canada.  On July 23, 1996,
Sears Canada announced its intention to eliminate certain positions and
close a warehouse and other support facilities as part of its ongoing cost
containment initiative.  In the third quarter the Company recorded a $17
million restructuring charge (before minority interest) related to this
initiative in addition to the $10 million which was recorded in the second
quarter.  The restructuring initiatives are projected to generate annualized
pretax savings of $35 to $45 million (before minority interest).
International selling and administrative expenses increased 90 basis points
to 24.5% for the nine-month period.  For the three- and nine-month periods,
excluding the restructuring charges, the International selling and
administrative expense as a percentage of revenues improved 50 basis points
and 30 basis points, respectively.


<PAGE>

				    -9-



		      ITEM 2. - SEARS, ROEBUCK AND CO.
	    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
		    CONDITION AND RESULTS OF OPERATIONS
THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 28, 1996 AND SEPTEMBER 30, 1995

							
    Depreciation and amortization expense was $173 million in the third
quarter and $502 million for the nine-month period, an increase of $30
million and $82 million, respectively, from the comparable 1995 periods. 
The increase reflects the continuation of the Company's store remodeling
program and the off-the-mall store expansion.

<TABLE>
Key domestic credit information                   
							      Balances At
<CAPTION>                                                              
							       Sept. 28,   Sept. 30,
(millions)                                                       1996        1995  
<S>                                                            <C>          <C>
Gross credit card receivables                                 $  24,637    $  21,902 
Receivable balances sold                                         (5,323)      (4,404) 
Owned credit card receivables                                 $  19,314    $  17,498 


								Three Months Ended         Nine Months Ended
							       Sept. 28,   Sept. 30,      Sept. 28,   Sept. 30, 
								 1996        1995           1996        1995
												
Gross credit card receivables delinquent sixty days or more      5.24%       4.00%          5.24%      4.00%
Net credit charge-offs to average gross credit card receivables  4.60%       3.19%          4.11%      3.04%
Reserves for uncollectible accounts as a percentage                                                  
  of gross credit customer receivables                           3.86%       4.20%          3.86%      4.20% 
</TABLE>
			       
    The provision for uncollectible accounts was $286 million in the third
quarter, a 53% increase from the same period last year.  The increase is
attributable to a number of factors, including the growth in gross domestic
credit card receivables and the rise in net charge-offs due to the
industry-wide trend of increased delinquencies and bankruptcies.  For
these same reasons, the provision for uncollectible accounts increased 52%
to $794 million in the nine-month period from $521 million in the comparable
prior year period.  The reserve for uncollectible gross credit card
receivables was $950 million and $920 million at September 28, 1996 and
September 30, 1995, respectively.  In response to the aforementioned trend,
the Company has implemented an aggressive action plan designed to mitigate
the increase in write-offs.  Components of the action plan include increases
in collection staffing levels and additional investments in technology to
improve productivity and increase capacity.

    Interest expense decreased $16 million to $326 million in the third
quarter of 1996 reflecting lower effective funding rates resulting from the
refinancing of long-term higher rate debt, partially offset by higher
funding requirements due to a larger gross receivable portfolio.  For the
nine-month period, interest expense decreased $11 million to $1.01 billion.

    Due to holiday buying patterns, merchandise sales are traditionally 
higher in the fourth quarter than other quarterly periods.  As such, a
disproportionate share of operating income is typically earned in the
fourth quarter.


<PAGE>

				    -10-

				    
		     ITEM 2. - SEARS, ROEBUCK AND CO.
	   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
		   CONDITION AND RESULTS OF OPERATIONS
THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 28, 1996 AND SEPTEMBER 30, 1995
							   

Financial Condition

	As of September 28, 1996, domestic merchandise inventories on the
first-in, first-out (FIFO) basis were $5.57 billion, compared with $5.09
billion at September 30, 1995 and $4.32 billion at December 30, 1995.  The
increase in the inventory levels reflects the expansion of selling space in
the department stores and the growth of the off-the-mall store businesses.

    Net cash provided by the Company's operating activities totaled $337
million for the first nine months of 1996, compared to net cash provided of
$540 million for the same period in 1995.  The decrease in operating cash
flow was largely attributable to the increase in inventory levels and owned
credit card receivables in 1996 as compared to 1995.

    Gross domestic credit card receivables were $24.64 billion at September
28, 1996, compared to $21.90 billion at September 30, 1995.  Sears, through
its wholly-owned subsidiary, Sears Receivables Financing Group, Inc., had
$5.32 and $4.55 billion of credit account pass-through certificates
("securitized receivables") outstanding at September 28, 1996 and
December 30,1995, respectively.  The change in the balance of securitized
receivables generated cash of $774 million during the nine months ended
September 28, 1996, compared to $457 million during the comparable 1995
period.

    In June 1996, SFAS No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities" was issued and is
effective for transfers and servicing of financial assets and extinguishments
of liabilities occurring after December 31, 1996.  The statement provides
consistent standards for distinguishing transfers (securitizations) of
financial assets that are sales from transfers that are secured borrowings.
The Company is currently evaluating the impact of the new accounting standard,
and expects that existing asset securitization programs will continue to
qualify for sale accounting treatment under the new standard.

    Net cash used in investing activities totaled $1.09 billion for the first
nine months of 1996 compared to $1.10 billion in 1995.  The decrease in net
cash used resulted from a prior year use related to discontinued operations
offset by cash used for the acquisition of the Orchard stores in September
1996, as well as higher capital expenditures in 1996 related to the Company's
department store remodeling program and the expansion of its store base.  As
part of its growth strategy, the Company may continue to pursue strategic
acquisitions.

    Net cash provided by financing activities totaled $795 million for the
first nine months of 1996 as compared to $487 million in 1995.  Financing
activities in 1996 were primarily long-term borrowings to support the growth
in credit card receivables and securitizations.  The Company used proceeds
from securitizations for general corporate purposes and to pay down
short-term borrowings.  Dividends paid to shareholders in 1995 included the
final dividend payment on the Series A Mandatorily Exchangeable Preferred
Shares ("PERCS") which were exchanged into common shares on March 20, 1995,
and a higher common dividend as compared to 1996.  In the first nine months
of 1995, the common share dividend payment was based on a quarterly payout
rate of $0.40 per common share, reflective of the Company's structure prior
to the spin-off of Allstate, as compared to the quarterly dividend payout
rate of $0.23 per common share for the first three quarters of 1996.

    On September 23, 1996, the Company announced its intention to redeem at
par all the outstanding 8.88% Preferred Shares, First Series on November 12, 
1996.  The redemption will result in a cash use of approximately $325 million
in the fourth quarter of 1996 and will subsequently reduce annual dividends
paid by $29 million.
	    

<PAGE>


				    -11-

				    

			PART II.  OTHER INFORMATION

			

Item 6.    Exhibits and Reports on Form 8-K.
	   
	   (a) Exhibits.
	       
	       An Exhibit Index has been filed as part of this Report on 
	       Page E-1.
	       
	   (b) Reports on Form 8-K.
	       
	       Registrant filed a current report on Form 8-K dated July 18,
	       1996 (Items 5 and 7) containing consolidated statements of
	       income and supplementary domestic operations information.



<PAGE>

				    -12-



				  SIGNATURE
				  
		 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.
					    (Registrant)

					   

	      November 8, 1996              By /s/ James A. Blanda
					       James A. Blanda
					       Vice President and Controller
					  
					       (Principal Accounting
						Officer and duly authorized
						Officer of Registrant)

						
<PAGE>



				    E-1
				    

			       EXHIBIT INDEX
			  SEARS, ROEBUCK AND CO.
	       THREE MONTH PERIOD ENDED SEPTEMBER 28, 1996
	       
 Exhibit No.

   3.          By-Laws of the Registrant as amended to August 14, 1996 
	       (incorporated by reference to Exhibit 4(E) to Registration
	       Statement No. 333-11973).

   4.          Registrant hereby agrees to furnish the Commission, upon 
	       request, with the instruments defining the rights of holders
	       of each issue of long-term debt of the Registrant and its
	       consolidated subsidiaries.

   10(a).      Registrant's Deferred Compensation Plan for Directors, as
	       amended and restated on October 9, 1996.

   10(b).      Registrant's Deferred Compensation Plan, as amended and
	       restated on October 9, 1996.
   
   10(c).      Form of severance and non-compete agreement for executive
	       officers of the Registrant.

   12(a).      Computation of ratio of income to fixed charges for Sears,
	       Roebuck and Co. and consolidated subsidiaries for each of the
	       five years ended December 30, 1995 and for the nine- and
	       twelve-month periods ended September 28, 1996.

   12(b).      Computation of ratio of income to combined fixed charges and
	       preferred share dividends for Sears, Roebuck and Co. and
	       consolidated subsidiaries for each of the five years ended
	       December 30, 1995, and for the nine- and twelve-month periods
	       ended September 28, 1996.

   15.         Acknowledgment of awareness from Deloitte & Touche LLP, dated
	       November 8, 1996, concerning unaudited interim financial
	       information.

   27.         Financial Data Schedule.