follow us

Target profits score 25 percent increase

Don Hogsett -- Home Textiles Today, May 17, 2004

Helped by a strong credit card business, another strong performance at Target Stores, and sharply improved earnings at Mervyn's and Marshall Field's; Target Corp. drove first-quarter profits up 25.4 percent, to $438 million from $349 million last year.

Sales at the diversified retailer, including credit revenues, climbed 12.3 percent, to $11.6 billion from $10.3 billion a year ago.

Providing a lift to earnings, and italicizing the growing importance of its relatively new credit card business, earnings from the credit operation increased 9.9 percent, to $166 million from $151 million.

The lucrative credit business now accounts for almost 38 percent of Target's total profit, but only 9 percent of its sales.

Providing another lift to the bottom line was an earnings turnaround at two laggard divisions now officially on the block — Mervyn's and Marshall Field's.

Even though sales declined 1.4 percent, Mervyn's boosted its bottom line 63.4 percent, to $39 million from $24 million last year.

The department store group pushed profits up 12.5 percent, to $22 million from $19 million, on a much smaller 4 percent increase at the top line.

The core Target mass merchant business pushed profits up 17.9 percent, to $866 million from $734 million last year. Sales climbed 14 percent, to $10.1 billion from $8.8 billion last year, and same-store sales grew 7.3 percent.

Average gross margin increased 50 basis points, or five-tenths of a percentage point, to 32.8 percent from 32.3 percent, on the strength of margin improvement at all three retail groups.

Acting as a partial offset, costs climbed 10 basis points, or one-tenth of a percentage point, to 23.5 percent from 23.4 percent.

Target Corp.

Qtr. 5/1 (x000) 2004 2003 % chg
Sales $11,249,000a $9,983,000a 12.7
Oper. income (EBIT) 1,193,000 1,022,000 16.7
Net income 438,000 349,000 25.4
Per share (diluted) 0.48 0.38 24.6
Average gross margin 32.8% 32.3% --
SG&A expenses 23.5% 23.4% --


First quarter segment results

2004 2003 % change
TARGET
Sales $10,051,000 $8,819,000 14.0
Same-store sales -- -- 7.3
Pre-tax profit 866,000 734,000 17.9
MERVYN'S
Sales 793,000 804,000 -1.4
Same-store sales -- -- -1.4
Pre-tax profit 39,000 24,000 63.4
MARSHALL FIELD'S
Sales 614,000 590,000 4.0
Same-store sales -- -- 6.1
Pre-tax profit 22,000 19,000 12.5
CREDIT CARDS
Sales 318,000 320,000 -0.5
Pre-tax profit 166,000 151,000 9.9


Featured Video

  • Online Moves From Afterthought To Main Thought For Textiles Suppliers

    Camera Icon More Videos

Other Home Furnishings Sites

Casual Living
Gifts and Decorative Accessories
Home Accents Today
Kids Today
Furniture Today