Target's 4Q profit rises 10 pct on solid holiday

[February 24, 2011]  NEW YORK (AP) -- Target Corp. reported a 10 percent gain in fourth-quarter profit, boosted by an improving credit card business and solid holiday sales.

The discounter on Thursday reported net income of $1.03 billion, or $1.45 per share for the three months ended Jan. 29. That compares with $936 million, or $1.24 per share, in the same period last year.

The results included an income tax benefit of 7 cents.

Total revenue rose 2.4 percent to $20.66 billion. Revenue at stores opened at least a year also rose 2.4 percent.

Analysts were expecting $1.39 per share on revenue of $20.28 billion.

Target, based in Minneapolis, had struggled with weak sales during the early part of the recession but has seen a rebound since 2009. The retailer's expanded food selection has helped bring in more customers.

The company's business is also benefiting from a discount offer, launched last October, that gives a 5 percent discount for shoppers paying with the company's branded credit card or debit card.

Target said that during the latest quarter the average customer's purchase rose only 0.8 percent but more customers came into its stores, fueling a 1.6 percent increase in transactions. Selling price per item fell 2.7 percent.

Within its credit card segment, profit increased to $151 million, compared with $39 million in the year-ago period, as bad debt expense declined to $83 million, from $284 million in the same period last year.

Target's results stand in stark comparison to those of Wal-Mart Stores Inc. For the past year, Wal-Mart has seen fewer customers coming in the doors as they shop at other rivals like Target.

Wal-Mart reported on Tuesday a 27 percent increase in profit, but posted a 1.8 percent drop in revenue at stores opened a least a year at its namesake U.S. business, which accounts for more than 60 percent of its total business.

[Associated Press; By ANNE D'INNOCENZIO]

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