Minneapolis, MN, November 12--Target Corp. reported a 78 percent jump in third quarter earnings on Thursday on strong revenue growth and the sale of its Mervyn's chain, but the nation's second-largest discounter just missed analyst estimates and predicted tough holiday sales comparisons.
Target said it earned $537 million, or 60 cents per share, up from $302 million, or 33 cents per share, during the same quarter last year. The results included $203 million, or 23 cents per share, from the sale of Mervyn's, which closed during the quarter. Without the Mervyn's sale, earnings would have been 37 cents per share, a penny short of expectations of analysts polled by Thomson First Call.
Revenue was $10.9 billion, up 11 percent from $9.8 billion during the same period last year. Same store sales grew by 4.5 percent.
Target shares closed down 11 cents at $50.77 on the New York Stock Exchange. Target stock began the year around $38 per share.
The company predicted that fourth quarter earnings would be around 94 cents per share, an increase of 3 percent from last year, matching analyst expectations.
Gazing forward to the important holiday season, the company predicted it may be tough to pass last year's fourth quarter, when the company still included the Marshall Field's department store chain and the Mervyn's discount store chain.
President Gregg W. Steinhafel predicted quarterly same store sales growth of 3 percent to 5 percent this year, versus 6 percent during the same quarter last year.
"The strength of last year's fourth quarter results presents a difficult hurdle for us this year," he said in a conference call with analysts.
Target said it has no plans now to expand overseas.
"There's no question that Target will be an international presence at some point in time," chairman and chief executive Bob Ulrich told analysts. But he said Target has no immediate international plans because he believes the company can at least double in size in the United States first.
For the first nine months of the year, Target earnings shot up 137 percent to $2.39 billion, or $2.64 per share, up from $1 billion, of $1.11 per share, during the same period last year. Revenue of $31.65 billion was up almost 12 percent from $28.35 billion a year ago.
Target operates 1,313 Target stores in 47 states and Target.com
