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Minneapolis-based Target Corp. reported a 2.8 percent boost in sales to $15.6 billion for the first quarter of fiscal year 2011 ending April 30.
Those results were couples with a boost in net earnings to $689 million for Q1, compared to $671 million for the same period a year ago.
“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,” said Gregg Steinhafel, Target chairman, president and CEO. “Our PFresh remodel program and 5 percent REDcard Rewards loyalty program continue to deliver incremental traffic and sales in an environment where our guests remain cautious in their spending. Throughout the organization we’re focused on driving sales by providing value, quality and reliability to our guests and delivering on both halves of our ‘Expect More, Pay Less’ brand promise.”
The boost in Q1 sales is credited to a 2 percent increase in comparable-store sales and the contribution from new stores. Segment earnings before interest expense and income taxes were $1.062 billion in Q1, a decrease of 4.2 percent from the year-ago period.
In Target’s credit card segment, Q1 average receivables decreased 14.4 percent to $6.5 billion in 2011 from $7.5 billion in 2010. Average receivables directly funded by Target increased 6 percent in the first quarter to $2.5 billion from $2.4 billion in 2010.
Segment profit for the quarter was $194 million, compared with $111 million in Q1 2010. Net interest expense for the quarter was $183 million, down from $187 million in the year-ago period.
During Q1 this year, the company repurchased about 15.4 million shares of its common stock at an average price of $53.32, for a total investment of $819 million.
Target operates 1,755 stores in 49 states nationwide.