This morning, Target Corporation (TGT) posted stronger-than-expected first-quarter 2010 results on the heels of a better sales environment, effective inventory management and cost containment efforts.
The quarterly earnings of 90 cents a share outpaced the Zacks Consensus Estimate of 87 cents, and soared 29.8% from 69 cents posted in the prior-year quarter.
Total revenue for the quarter increased 5.1% year over year to $15,593 million. Retail sales grew 5.5% to $15,158 million as shoppers are gradually loosening their purse strings. Apparel remains one of the strongest categories.
Comparable-store sales for the quarter grew 2.8%, a substantial improvement over a decline of 3.7% registered in the prior-year quarter. The number of transactions rose to 2.2%, whereas the average transaction amount increased marginally by 0.7% in the quarter.
Target’s strategic initiatives should help the company gain market share, and drive comparable-store sales growth. Target now tends to focus more on store renovations and enhance store sales productivity, including introducing smaller format stores.
The company said that revenue from the Credit Card segment dropped 7.9% to $435 million. However, Target was quick to indicate that segment profit rose to $111 million in the quarter from $39 million delivered in the prior-year quarter, helped by a decline in bad debt expenses.
Target during the quarter repurchased about 7.5 million shares at a price of $52.27 each, aggregating $394 million, under the share repurchase program authorized in November 2007.
At the end of the quarter, Target operated 1,740 stores in 49 states, of which 1,489 were Target general merchandise stores and 251 were SuperTarget Stores.
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