Target Corp Profits Up

Published by: Dave Simmons on 17th Aug 2011 | View all blogs by Dave Simmons
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Target Corp Profits Up

Target released second-quarter figures Wednesday, posting a 3.7 percent rise in profits thanks to its move to sell groceries and successful incentives to credit card shoppers.  The retailer also increased its outlook for full-year earnings to a range that exceeded analysts' estimates.  The company began selling more groceries this year to more effectively compete with Wal-Mart, and began offering a 5 percent discount to shoppers who pay with credit cards last October.

For the three months ended July 30th, Target earned $704 million, or $1.03 a share, up from its 2Q 2010 earnings of $679 million, or 92 cents a share.  Overall revenue, meanwhile, rose 4.6 percent to $16.24 billion from a year ago.  Analysts taking part in a recent Bloomberg News survey had projected a report of 97 cents a share in earnings on revenue of $15.9 billion, on average.

Indicating the success of its grocery and credit card incentive moves, sales at Target stores open a year or more increased 3.9 percent during the period.  The same store sales measure is considered key to a retailer's performance as it excludes data from stores that opened or closed during a given period.  During the first quarter, Target's same store sales rose about 2 percent.  The company's credit card business, meanwhile, enjoyed net income of $171 million for the May-July period, compared to $138 million in the same period a year ago.

Target also improved its full-year outlook, and is now expecting earnings in the range of $4.15 to $4.30 a share, surpassing analysts' prediction of guidance calling for $4.14 a share in earnings.

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