Target Profit Beats Forecasts
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Target Corp. (TGT) Thursday posted a bigger-than-expected 50 percent jump in quarterly profit as a hot summer drove demand for clothing and outdoor gear.
The second-largest U.S. discount retailer said it earned $540 million, or 61 cents a share, in the second quarter ended July 30, compared with $360 million, or 39 cents a share, a year earlier.
Analysts, on average, expected a profit of 59 cents per share, according to Reuters Estimates (search). The company last month raised its forecast to at least 58 cents per share following surprisingly strong June sales.
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Last year's results exclude a $1.02 billion gain on the sale of the Marshall Field's (search) department store chain, but include a loss of $74 million, or 5 cents per share, from early retirement of debt.
Quarterly revenues rose 13.6 percent to $11.99 billion, while sales at stores open more than a year — a key retail measure known as same-store sales — rose 6.7 percent.
The retailer, which trails Wal-Mart Stores Inc. (WMT) in the U.S. discount sector, has found a niche selling low-priced trendy merchandise by designers including Isaac Mizrahi (search).
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Target's same-store sales have been growing faster than Wal-Mart's in recent quarters. Wal-Mart is expected to release its second-quarter results next week.
Target said its credit card business contributed $153 million to earnings before interest and income taxes, up 28 percent from a year earlier