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Target Corp.’s first-quarter profits rose by nearly 30 percent on strong sales of clothing and other discretionary items, with its net earnings of $671 million during the quarter ended May 1, 2010, handily besting the $522 million posted in the year-ago quarter. The Minneapolis-based retailer’s first-quarter earnings per share (EPS) increase to 90 cents from 69 cents in the comparable year-ago period was the highest EPS from continuing operations in Target’s history, excluding holiday-driven fourth-quarter results.
“We’re very pleased with our first-quarter financial results, which were the result of disciplined execution by our teams in a stronger-than-expected economic environment,” said Gregg Steinhafel, Target’s chairman, president, and CEO. “Our retail segment delivered results well above our expectations, as sales of higher-margin discretionary items were particularly strong, especially in apparel. Profitability in our credit card segment was also well above expectations, as declining risk levels led to a sharp reduction in bad-debt expense, compared with a year ago. Going forward, we will continue our relentless focus on delighting our guests by delivering the right fashion, great quality at low prices, and a superior guest experience in our stores and online.”
Meanwhile, Target’s sales increased 5.5 percent in the first quarter to $15.2 billion in 2010, from $14.4 billion in 2009, due to a 2.8 percent increase in same-store sales and the contribution from new stores. Retail segment earnings before interest expense and income taxes (EBIT) were $1,108 million in the first quarter of 2010, an increase of 15.2 percent from $962 million in 2009.
During a conference call with investors on Wednesday, Steinhafel said the company might consider opening international stores no earlier than 2013. Its top priorities for the present are to expand grocery sections in its stores and add smaller-footprint locations.