Target profit rises 22.6%, sees strong holiday
Minneapolis -- Target Corp.'s fiscal third-quarter earnings rose 22.6%, beating analysts' estimates, boosted by improvements in its credit-card business and rising food sales. The chain also projected a strong holiday, saying it expects an important sales measure to rise more sharply than it has in three years. It is hoping to lure more shoppers during the holidays with its updated store layout and a new credit-card program that offers 5% off all purchases.
“Based on our merchandising and marketing plans, combined with the expected impact of REDcard rewards and our newly completed remodel program, we expect Target's fourth quarter comparable-store performance will be the best of any quarter in the last three years," CEO Gregg Steinhafel said in a statement.
Target posted net income of $535 million in the quarter ended Oct. 30, up from $436 million in the year-ago period. Revenue rose 2.2% to $15.61 billion.
Within its credit-card segment, profit increased to $130 million from $60 million a year ago, as bad debt expense declined 64% to $110 million, from $301 million in same period last year.
At Target's retail segment, revenue increased 3% to $15.2 billion. Same-store sales rose 1.6%.