Minneapolis – Stronger-than-expected
credit card profits offset disappointing retail sales to send Target’s
first-quarter earnings up 2.7 percent to $689 million.
Retail sales rose 2.8
percent to $15.6 billion during the three months ended April 30, and same-store
sales increased 2 percent. Nevertheless, chairman/president/CEO Gregg
Steinhafel described the retail results as “weaker than anticipated” despite
incremental gains in traffic and sales from its 5-percent Target credit card
rebate program and the addition of grocery departments throughout much of the
chain. However, the two initiatives took a toll on gross margin rate, which
declined to 30.4 percent from 31.3 percent during the year-ago period.
Going forward, the
discounter will remain “focused on driving sales by providing value, quality
and reliability to our guests and delivering on both halves of our ‘Expect more, pay less’ brand
promise,” Steinhafel said.
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