Target taking price hikes
Home & Textiles Today Staff -- Home Textiles Today, November 10, 2005
MINNEAPOLIS -- Target Stores is accepting price hikes from many of its suppliers, particularly in food -- and passing them along to consumers successfully for the most part, the retailer said during its third-quarter earnings call today.
Driven by robust same-store sales, wider margins and a rapidly growing credit business, third quarter profits from continuing operations jumped 34.5 percent, to $435 million from $324 million last year.
Retail sales climbed 11.7 percent, to $11.9 billion, and comps improved 5.9 percent. Credit card sales raced ahead 18.1 percent. Total revenuesrose 11.9 percent, to $12.2 billion.
Net income declined 18 percent, to $435 million from $531 million, but the year-over-year comparison is skewed by one-time items related to the sale of Mervyn's, which inflated last year’s profit by $207 million.
Responding to analysts' concerns about the home department's lagging performance, compared with the total company, Gregg Steinhafel, president, said he expects shoppers' response to the new Thomas O'Brien collection will resemble that of Fieldcrest.