Target Hits The Bullseye: Retailer Beats Estimates (TGT)

Target TGT reported stronger than expected earnings, but missed on revenue estimates, as the Minnesota-based retailer said its credit-card business helped beat earnings. The company said it had to set aside less money to account for customers who didn't pay their bills. The company earned 99 cents per share on revenues of $15.93 billion. This compares to Wall Street estimates of 95 cents per share on $15.99 billion in revenues. In the first quarter 2011, the company repurchased approximately 15.4 million shares of its common stock at an average price of $53.32, for a total investment of $819 million. “Our first quarter financial performance was the result of stronger-than-expected profitability in our Credit Card Segment, which offset the impact of weaker-than-anticipated sales in our Retail Segment,” said Gregg Steinhafel, chairman, president, and chief executive officer of Target Corporation. “Our PFresh remodel program and 5% REDcard Rewards loyalty program continue to deliver incremental traffic and sales in an environment where our guests remain cautious in their spending. Throughout the organization we're focused on driving sales by providing value, quality and reliability to our guests and delivering on both halves of our Expect More. Pay Less. brand promise.” The company said its credit card business was strong, as it earned $194 million in the past quarter, up from $111 million last year. Bad debt was only $12 million, down sharply from last year, when it wrote down $197 million. The company was cautious on the American consumer, saying it sees rising gasoline prices affecting the consumer, as well as the battles with inflation.