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Target Sales, Comps Rise

11/10/2005 09:09:00 AM Eastern

Minneapolis — Total fiscal third-quarter revenue at Target climbed 11.9 percent, reaching $12.2 billion, up from $10.9 billion, driven by a 5.9 percent increase in comp-store sales, combined with the contribution from new-store expansion and the retailer’s credit card operations, which reported $359 million in revenue.

Net earnings for the three months, ended Oct. 29, decreased 18 percent to $435 million from a year-ago $531 million, when the retailer benefited from a $203 million gain on the disposal of discontinued operations.

Target said its gross margin rate “improved sharply” in the third quarter, compared with the prior year, primarily due to higher markup. Favorability in markdowns and inventory shrink also contributed to the improvement. However, the three hurricanes and other factors, contributed to an unfavorable expense rate, compared to last year.

Earnings from continuing operations increased to $435 million, a 34.5 percent rise over the $324 million recorded in the third quarter last year.

During the third quarter, Target increased its number of stores to 1,400, from 1,313 in the same three months in 2004.

For the nine months, total sales rose 12.7 percent, reaching $35.7 billion, up from $31.6 billion. Comp-store sales jumped 6.3 percent.

Net earnings dropped 38.1 percent to $1.5 billion from a year-earlier $2.4 billion, due mainly to a $1.2 billion gain on the disposal of discontinued operations.

Earnings from continuing operations for the nine months jumped 36.7 percent, hitting $1.5 billion, up from $1.1 billion in the same quarter last year.

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