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Target Q1 Store Sales Increase 9.8%

5/15/2003 09:12:00 AM Eastern

Minneapolis - The Target stores division of Target Corp. boosted sales 9.8 percent during the retailer's fiscal first quarter, hitting $8.8 billion, up from $8 billion in the year-ago period.

This increase, which helped push overall Target Corp. revenue up 7.6 percent in the first quarter, was driven mainly by new store expansion and growth in credit card operations. Comp-store sales at the stores segment for the three months edged upward 1.1 percent.

Pre-tax segment profit at Target stores jumped 8.2 percent in the first three months, ended May 3, reaching $734 million, compared with $678 million year-on-year. Target stores Earnings Interest, Taxes, Depreciation and Amortization (EBITDA) increased by 9.6 percent in the first quarter, to $985 million, up from $899 million in the same quarter a year earlier.

Consolidated revenue for Target Corp. in the fiscal first quarter, hit $10.3 billion, up from a year-earlier $9.6 billion. Comp-store sales inched upward 0.1 percent. The retailer enjoyed an overall 31.5 percent increase in credit card revenue, notching $339 million in the first quarter, compared with $258 million in the same period in 2002.

Consolidated net earnings edged upward 1.3 percent, to $349 million, compared with the $345 million registered in the first quarter of the previous year. In the first three months, Target said the company's gross margin rate was essentially unchanged from the prior-year figure.

'In light of our soft sales performance during the quarter, we are pleased with our first quarter result,' said Bob Ulrich, chairman/CEO. 'To continue to achieve profitable market share growth in this environment, we remain focused on maintaining operational and financial discipline.' he said.

Target operated 1,167 stores at the end of the first quarter, including 102 SuperTargets, compared with 1,081 stores at the end of the 2002 first fiscal quarter, which included 75 SuperTargets. Store square footage increased 10.6 percent year over year.