Minneapolis - Stronger-than-expected
credit card profits offset disappointing retail sales to send Target's
first-quarter earnings up 2.7 percent to $689 million.
Retail sales rose 2.8
percent to $15.6 billion during the three months ended April 30, and same-store
sales increased 2 percent. Nevertheless, chairman/president/CEO Gregg
Steinhafel described the retail results as "weaker than anticipated" despite
incremental gains in traffic and sales from its 5-percent Target credit card
rebate program and the addition of grocery departments throughout much of the
chain. However, the two initiatives took a toll on gross margin rate, which
declined to 30.4 percent from 31.3 percent during the year-ago period.
Going forward, the
discounter will remain "focused on driving sales by providing value, quality
and reliability to our guests and delivering on both halves of our â€˜Expect more, pay less' brand
promise," Steinhafel said.