US: Target profit soars, eyes grocery expansion
Christmas sales beat Target's expectations
US retailer Target Corp. today (23 February) posted a jump in fourth-quarter profits, boosted by a stabilisation of its credit card business and better-than-expected holiday sales.
The company said that it earned US$936m in the quarter ended 30 January, up 53.7% from last year.
Sales increased 3.2% to $20.18bn, the US discounter said. Retail segment sales rose 3.7% in the fourth quarter to $19.7bn, boosted by new store openings. Same-store sales were up 0.6% in the period.
The performance of Target's credit-card segment has weighed on the bottom line. However, fourth-quarter credit card expenses fell 37% and the unit swung to a profit in the latest quarter.
Commenting on the result, chairman, president and CEO Gregg Steinhafel said gains had been driven by “discipline” and “innovation”.
“Fourth quarter retail segment performance was well above our expectations due to stronger-than-expected holiday sales, combined with well-controlled inventories and disciplined expense controls, he said.
The group indicated that it expected to win market share in the coming year as it remodels US stores to include more grocery items.
“In 2010, we expect our guest traffic trends and sales of discretionary categories to benefit from broader implementation of our new merchandise initiatives as well as a continued modest recovery in the economy, and believe Target will continue to gain profitable market share,” Steinhafel said.
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