Target's profit up 11%
Minneapolis -- Target Corp. reported Thursday that net income for the quarter ended Jan. 29 rose 11% to $1.04 billion, helped by improved revenues and fewer write-offs of bad credit-card debt.
Retail sales increased 2.8% in the fourth quarter to $20.3 billion, from $19.7 billion in the year ago period. Same-store sales rose 2.4%. Analysts polled by Thomson Reuters had forecast $20.76 billion in revenue.
"We're very pleased with our fourth quarter and full-year 2010 financial results, which reflect strong performance in both of our business segments," said Gregg Steinhafel, Target Corp. chairman and CEO. “In 2011, we will continue to focus on driving sales and traffic and providing an enhanced shopping experience through key strategic initiatives that include our ambitious remodel program, 5% REDcard Rewards and the launch of our new Target.com platform.”
Target said that during the latest quarter the average customer's purchase rose only 0.8% but more customers came into its stores, fueling a 1.6% increase in transactions. Its results offered a stark comparison to those of Walmart, which has seen fewer customers coming in the doors.
Within its credit-card segment, profit increased to $151 million, compared with $39 million in the year-ago period, as bad debt expense declined to $83 million, from $284 million in the same period last year.
For fiscal 2010, sales increased 3.7% to $65.8 billion from $63.4 billion in 2009, with a 2.1% increase in same-store sales combined with the contribution from new stores.