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Target Earnings Jump on Sale of Marshall Field's

Associated Press
Published | Updated

MINNEAPOLIS – Second-quarter earnings at Target Corp. (TGT) quadrupled due to a one-time gain from the sale of its Marshall Field's (search) department stores to The May Department Store Co. (MAY).

The discount retailer Thursday reported net income of $1.42 billion, or $1.54 per share, up from $358 million, or 39 cents per share, in the same quarter last year. Total revenues were $10.56 billion, up 10 percent from $9.59 billion in the second quarter of 2003, driven by a 3.9 percent increase in comparable-store sales — sales at stores open at least a year.

Earnings from continuing operations were $366 million, or 40 cents per share, up 11 percent from $329 million, or 36 cents per share, in the second quarter last year. The earnings for continuing operations included a pretax loss of $74 million related to the repurchase of $455 million in debt.

Analysts surveyed by Thomson First Call had estimated 47 cents per share.

"We are pleased with our strong second-quarter results at Target Stores, and confident that we will continue to enjoy profitable market-share growth throughout the remainder of 2004 and well into the future," Bob Ulrich, chairman and chief executive officer, said in a statement.

Earnings for the first six months were $1.85 billion, or $2.02 per share, up 162 percent from $707 million, or 77 cents per share, in the first half of 2003. Revenues were $20.74 billion, up 12 percent from $18.52 billion in the first six months last year.

Target operates 1,272 Target stores in 47 states and the online business Target.com.

On July 29, Target said it had agreed to sell its Mervyn's subsidiary, including 257 stores, to an investment group and to sell Mervyn's (search) credit card receivables to GE Consumer Finance for a total price of around $1.65 billion. The transaction is expected to close in the third quarter. Target said it expects the sale to result in a pretax gain of about $270 million.

Separately, Target expects its sale of nine Mervyn's stores in Minnesota to The May Department Store Co. to also close in the third quarter, and said the deal will not affect earnings.