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Target Enjoys Banner Third Quarter

Target Corporation moved forward to another banner financial year with impressive numbers for the third quarter. The nation's second largest mass merchant reported an almost 80 percent boost in its net income for the quarter just ended, registering $537 million.

The company posted a 13 percent pickup in its operating profit, which finished the quarter at nearly $1.2 billion. It also increased its sales by more than 11 percent to $10.6 billion. Including its net credit revenues, the retailer's total third-quarter revenues topped $10.9 billion, 11 percent greater than the third quarter of 2003. Same-store sales rose 4.5 percent for the quarter.

Bob Ulrich, Target's chairman and CEO, professed himself pleased with “our strong growth and continued market-share gains during the third quarter, particularly in light of last year's solid sales and earnings performance.” The results included a gain of $203 million from Target's sale of Mervyn's to an investment consortium, which was finalized in September.

The only negative for the quarter was a 30-basis point increase in Target's percentage of selling, general and administrative expenses to sales, which was 22.3 percent. Total SG&A rose by almost 13 percent, and was driven upward by a lease accounting adjustment.

For the first three quarters of 2004, Target logged net income of $2.4 billion, up a phenomenal 137 percent from net earnings from 2003's first three quarters; and operating income of nearly $3.7 billion, 13 percent better than last year. Nine-months sales rose 12 percent to $30.8 billion, and total revenues increased by nearly the same ratio to more than $31.6 billion.

Target Corporation

Qtr. 10/30 (x000) 2004 2003 % Chg
Net sales $10,619,000 $9,552,000 11.2
Operating income 1,153,000 1,020,000 13.0
Net income 537,000 302,000 77.8
Earnings per share 0.60 0.33 81.8
Average gross margin 32.9% 32.4% --
SG&A percentage 22.3% 22.0% --
Nine months
Net sales 30,805,000 27,539,000 11.9
Operating income 3,669,000 3,248,000 13.0
Net income 2,391,000 1,009,000 137.0
Earnings per share 2.62 1.10 138.2
Average gross margin 33.3% 32.8% --
SG&A percentage 21.7% 21.3% --


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