Target Q1 profit up 2.7% on credit-card business gains
Minneapolis -- Target Corp. on Wednesday reported that its net income in the first quarter rise 2.7% to $689 million, up from $671 million in the year-ago period. Its results, which beat Street expectations, were boosted by its credit-card business as sales came in weaker than expected.
Total revenue in the quarter, ended April 30, rose 2.2% to $15.9 billion.
Same-store sales rose 2%. Analysts expected revenue of $16.02 billion.
"Our first-quarter financial performance was the result of stronger-than-expected profitability in our credit-card segment, which offset the impact of weaker-than-anticipated sales in our retail segment," Gregg Steinhafel, Target's chairman, president and CEO, said in a statement. He noted that shoppers remain "cautious" in their spending.
Target's results came two days after hedge fund manager and activist investor William Ackman disclosed that he had sold his shares in the company.
In its credit-card sector, Target’s quarterly profit was $194 million, compared with $111 million in the last year's quarter. Bad debt expense was $12 million in the period, down from $197 million in 2010.