Target posts higher first-quarter profit

Target Corp posted a higher profit on Wednesday as warm weather and an early Easter helped boost sales at the beginning of the quarter and it raised its expectations for the year.


The discount chain expects economic uncertainty to continue for the rest of 2012, Chairman and Chief Executive Gregg Steinhafel said in a statement.

Target earned $697 million, or $1.04 per share, in the first quarter that ended in April, up from $689 million, or 99 cents per share, a year earlier.

Target is preparing for its 2013 entry into Canada and said costs related to its first international expansion cut about 8 cents per share from its quarterly profit.

Excluding those Canada costs, adjusted earnings per share of $1.03 topped analysts' expectations of $1.01, according to Thomson Reuters I/B/E/S.

Target, which sells basic goods such as soap and paper towels along with limited-edition items from the likes of designer Jason Wu, has been seeing more customers shop with its credit cards, which offer a 5 percent discount and free online shipping.

The company raised its fiscal-year profit view 5 cents per share. It now expects to earn $4.60 to $4.80 per share on an adjusted basis and $4.10 to $4.30 on a GAAP basis this year.

For the second quarter, it anticipates earning $1.04 to $1.14 per share on an adjusted basis and 94 cents to $1.04 per share on a GAAP basis.

Sales at stores open at least a year, or same-store sales, rose 5.3 percent, the strongest quarterly performance in more than six years, Target previously said. That fell short of analysts' average forecast of 5.6 percent growth, according to Thomson Reuters.

Sales rose 6.1 percent to $16.54 billion, Target said earlier this month.

Total revenue, including credit-card revenue, rose 5.9 percent to $16.87 billion.

Target said 11.6 percent of sales in its stores were paid for with its REDcard credit and debit cards. A year ago, only 7.6 percent of sales were paid for with the cards.

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