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.