NEW YORK (AP) — Target Corp., buoyed by its push into
groceries and incentives it offers credit cardholders, posted a 3.7
percent increase in second-quarter profit and said earnings for the year
will beat Wall Street estimates.
Target is counting on two key
initiatives to drive revenue — its larger food offering and its 5
percent discount it began offering in October to customers who pay with
Target branded credit and debit cards.
As a result of its
strategy, Target had a 3.9 percent increase in revenue at stores opened
at least a year __ a key indicator of a retailer’s health because it
excludes results from stores that recently opened or closed. That was up
from a 2 percent pace in the first quarter.
"We’re very pleased
with our second-quarter financial results," said Gregg Steinhafel,
Target’s CEO, in a statement. "We continue to focus on strong execution
of our strategy, preparing Target to perform well in a variety of
economic environments."
Target, based in Minneapolis, said it
earned $704 million, or $1.03 per share, for the second-quarter ended
July 30. That compares with $679 million, or 92 cents per share, in the
same period a year ago. Revenue rose 4.6 percent to $16.24 billion, up
from $15.53 billion. Analysts were expecting 97 cents per share on
revenue of $15.9 billion.
Target’s credit- card business reported a
profit of $171 million in the quarter, up from $138 million in the
year-ago period. Target said that it expects full-year profits to be in
the range of $4.15 per share to $4.30 per share. Analysts had expected
$4.14 per share.
Target’s results came a day after rival Wal-Mart
Stores Inc., the world’s largest retailer, reported a 5.7 percent
increase in second-quarter profits and raised its outlook for the year
as it benefited from international sales growth and cost cutting. But
the discounter was unable to stop a two-year sales slump at its Walmart
stores in the U.S as customers continue to grapple with a weak job
market and other economic woes.
Copyright 2011 The Associated Press.