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Target Reports Higher Profits, Retail Sales

11/17/2010 09:40:36 AM Eastern

Minneapolis - Target reported higher net earnings and higher
retail sales in its fiscal third quarter, ended Oct. 30.

Net
earnings of $535 million for the quarter compare with $436 million in the
prior-year period.

"We're
pleased with Target's third-quarter financial performance, and we are
well-positioned for the fourth quarter," said Gregg Steinhafel, chairman,
president/CEO of Target.

"We've
built our holiday season plans to create excitement and provide our guests
unbeatable value. In addition, our guests can save more than ever with our new
5 percent REDcard rewards program. Based on our merchandising and marketing
plans, combined with the expected impact of REDcard rewards and our newly
completed remodel program, we expect Target's fourth quarter comparable-store performance
will be the best of any quarter in the last three years."

Sales
increased 3 percent in the third quarter to $15.2 billion in 2010, from $14.8
billion in 2009, due to a 1.6 percent increase in comp-store sales combined
with the contribution from new stores. Retail segment earnings before interest
expense and income taxes (EBIT) were $816 million in third quarter 2010, an
increase of 3.2 percent from $791 million in 2009.

Third-quarter
EBITDA and EBIT margin rates were 8.8 percent and 5.4 percent, respectively,
compared with 9.0 percent and 5.3 percent in 2009. These changes were the
result of a modest decline in the gross margin rate, offset by favorability in
the selling, general and administrative (SG&A) expense rate and the
depreciation and amortization (D&A) expense rate.

Third-quarter
segment profit increased to $130 million, from $60 million a year ago, as bad
debt expense declined 64 percent from $301 million in third quarter 2009 to
$110 million this year.

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