NEW YORK – Target Corp. said Wednesday quarterly profit rose almost 18 percent, boosted by its credit card business and strong sales at established stores.
Its shares rose 1.7 percent to $59.04 in premarket trading.
The No. 2 U.S. discount chain, behind Wal-Mart Stores Inc. , said profit rose to $651 million, or 75 cents per share, in its fiscal first quarter, ended May 5, from $554 million, or 63 cents per share, in the same period a year earlier.
Analysts, on average, were expecting 71 cents per share, according to Reuters Estimates
In recent quarters, Target's sales gains at stores open at least a year have outpaced those of Wal-Mart, boosted by its trendy but inexpensive designer merchandise, like its Isaac Mizrahi home decor and clothing.
It is also increasing its selection of food to bring shoppers to its stores more often.
Target's first-quarter revenue rose 9.2 percent to $14.04 billion. Sales at stores open more than a year -- a key retail gauge known as same-store sales -- increased 4.3 percent.
Credit card revenue rose to $418 million from $370 million. Target offers a Target Visa and another card that can be used only at its stores.
Last week, Wal-Mart reported an 8.1 percent rise in first-quarter profit but forecast second-quarter earnings that could fall short of Wall Street targets as it cuts prices to clear out spring clothing.
Wal-Mart's first-quarter U.S. same-store sales rose 0.6 percent, excluding the impact of fuel.
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