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Published
Feb 23, 2010
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Target profit rises in holiday quarter

By
Reuters
Published
Feb 23, 2010

SAN FRANCISCO (Reuters) - Target Corp (TGT.N) posted a quarterly profit slightly above Wall Street expectations, but investors had hoped for a bigger improvement and shares fell 1 percent.



The No. 2 U.S. discount retailer said sales in the holiday quarter were better than expected, and it expects traffic and sales of discretionary merchandise to improve in 2010.

"In this (market) if you don't blow the number out, your stocks not going to go up and this was basically an in-line earnings number," said Robert W. Baird & Co. analyst Peter Benedict.

Net income was $936 million, or $1.24 per share, in the fourth quarter ended January 30, compared with $609 million, or 81 cents per share, a year earlier.

Excluding a lower provision for income taxes, earnings were $1.17 per share. Analysts, on average, were expecting earnings of $1.16 per share, according to Thomson Reuters I/B/E/S.

Sales rose 3.7 percent to $19.72 billion. Sales at stores open at least a year, a key gauge of a retailer's health, rose 0.6 percent.

Last year, Target's quarterly profit fell nearly 41 percent as it cut prices to clear holiday merchandise and lost money in its credit card segment as shoppers fell behind on payments.

Since then, Target has reduced inventory and increased its focus on food and pharmacy items to appeal to frugal shoppers. It is also offering to match competitors' prices.

Target's results come less than a week after larger rival Wal-Mart Stores Inc (WMT.N) (WMT.N) reported higher quarterly profit, but said sales at its U.S. discount stores fell during the holiday quarter and traffic declined.

Target shares were down 60 cents at $50.04. Wal-Mart shares were down 23 cents at $53.60.

(Reporting by Nicole Maestri, editing by Dave Zimmerman and Derek Caney)

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