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Target, Mervyn's drive 2Q profits up by 5%

MINNEAPOLIS — Second-quarter profits at Target Stores rose by 5.2 percent, to $271 million from $258 million last year, boosted by continued strength in its core Target Stores and a strong operating profit at Mervyn's.

Sales advanced by 8.4 percent, to $8.8 billion from $8.1 billion last year, with a solid 11.8 percent increase at Target Stores offsetting declines at Mervyn's and Marshall Field's.

Holding profits somewhat in check, average gross margin tightened by 40 basis points, to 30.7 percent from 31.1 percent a year ago, "reflecting both a modest decline in gross margin rate at Target and the mix impact of growth at Target, our lowest gross margin rate division," the retailer said.

Bob Ulrich, ceo, said, "We remain confident that we are well positioned to deliver reasonable growth in earnings per share throughout the remainder of 2001. Over the long term, we remain confident in our ability to achieve average annual earnings per share growth of 15 percent or more."

Target At A Glance Results by retail segment (all figures, excluding %, in $x000)

Sales 2001 2Q 2000 2Q % CHG
Target $7,311,000 $6,541,000 11.8%
Mervyn's 933,000 940,000 -0.8
Marshall Field's 606,000 661,000 -8.2
Same-store sales 2001 2Q 2000 2Q % CHG
Target 3.4% 3.1%
Mervyn's -0.6 -1.1
Marshall Field's -8.8 -6.6
Operating Profits 2001 2Q 2000 2Q % CHG
Target $522,000 $478,000 9.2%
Mervyn's 60,000 55,000 9.5
Marshall Field's 16,000 35,000 -56.4
Inventories 2001 2Q 2000 2Q % CHG
Target 3,193,000 2,879,000 10.9
Mervyn's 587,000 588,000 -0.2
Marshall Field 393,000 429,000 -8.4

Target Corp.

Qtr. 8/4 (x000) 2001 2000 % CHG
a-Second-quarter and six-month results include a $1 one-time charge stemming from the early retirement of debt, compared with a prior-year credit of $1 million.
Sales $8,952,000 $8,251,000 8.5
Oper. income (EBIT) 548,000 518,000 5.8
Net income 271,000a 258,000a 5.2
Per share (diluted) 0.30 0.28 5.9
Average gross margin 30.7% 31.1%
SG&A expenses 23.2% 23.5%
Six months
Sales 17,003,000 15,736,000 8.1
Oper. income (EBIT) 1,064,000 1,003,000 6.1
Net income 525,000a 497,000 5.6
Per share (diluted) 0.58 0.54
Average gross margin 31.1% 31.4%
SG&A expenses 23.5% 23.8%

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