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Target Revenue Climbs 12.7%

5/12/2005 08:52:00 AM Eastern

Minneapolis — Delivering a fiscal first-quarter performance that reflects “discipline in executing its strategy,” Target boosted revenue 12.7 percent, hitting $11.5 billion, up from a year-ago $10.2 billion. Same-store sales rose 6.2 percent.

Of Target’s total revenue, the retailer’s net credit-card-operation revenue accounted for $306 million in the first three months, also up 12.7 percent, compared with $271 million in the same quarter last year. Total revenue includes both retail sales and net credit revenue.

Target, which credited new store expansion and its credit card operations for much of its revenue movement, reported first-quarter earnings from continuing operations of $494 million, a 26.4 percent rise over the $392 million recorded in the same three months last year.

Earnings before interest and income taxes (EBIT) climbed 17.4 percent for the quarter, ended April 30, reaching $907 million, compared with $773 million year-on-year. The contribution from the company’s credit card operations to EBIT was $142 million, an increase of $31 million, or 27.9 percent, over the $111 million reported year-over-year.

Target said its gross margin rate for the first quarter improved from the prior year, reflecting favorable markup and shortage performance, while its expense rate in the first three months was unfavorable, compared with the prior year.

Target repurchased $453 million of its common stock in the first quarter, acquiring 9.2 million shares at an average price of $49.37.

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