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Target Stores Segment Sales Rise 14%

5/13/2004 09:05:00 AM Eastern

Minneapolis — Boasting year-over-year profit growth in all three of its retail segments, Target cited its Target stores division for its individual strength.

Fiscal first quarter sales at the Target stores division jumped 14 percent, hitting $10.1 billion, up from $8.8 billion in the year-ago period. Comp-store sales increased 7.3 percent.

Pre-tax segment profit for the Target stores segment reached $866 million in the first three months, ended May 1, a 17.9 percent jump over the $734 million recorded in the first quarter of last year. The segment’s pre-tax profit as a percentage of revenue climbed to 8.6 percent, up from 8.3 percent year-on-year.

As of May 1, Target operated 1,249 doors, including 119 SuperTargets, compared with 1,167 as of May 3, last year, with 102 SuperTargets.

For its two department store segments in the first three months, Target reported a 6.1 percent sales increase at Marshall Field’s and a 1.4 percent sales decrease at Mervyn’s. However, Marshall Field’s pre-tax segment profit rose 19.2 percent in the first quarter, and Mervyn’s profit was up 63.4 percent.

The Target stores segment first quarter sales jump contributed heavily to a consolidated Target Corp. sales climb of 6.6 percent, reaching $11.6 billion from $10.3 billion year-over-year. Comp-store sales rose 6.6 percent.

For the first quarter, consolidated pre-tax segment profit increased 19.2 percent, hitting $927 million, up from $777 million in the same period a year ago. Gross margin rate improved over the prior year, reflecting markdown improvements at all three retail segments, while the company’s expense rate was "slightly unfavorable," compared with last year.

Consolidated net earnings came in at $438 million in the first three months, compared with a year-over-year $349 million, a 25.4 percent hike.