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Target's Net Income Declines 18%

Results were boosted a year earlier by the sale of its Mervyns chain. Also, Kohl's profit rises 15%.

November 11, 2005|From Associated Press

Discount retailer Target Corp. said Thursday that fiscal third-quarter net income fell 18% from results boosted by one-time gains a year earlier.

Expanding profit margins helped Minneapolis-based Target, but company executives said they were not counting on that again during the fourth quarter.

"As always, we expect this holiday season to be very promotional and highly competitive," President Gregg Steinhafel said on a conference call with analysts. Last year, retailers resorted to deep discounting during the holiday season, although profits were generally strong.

Target reported net income of $435 million, or 49 cents a share, for the quarter that ended Oct. 29. The compares with $531 million, or 59 cents, the year before, when the sale of its Mervyns chain boosted earnings by $203 million.

Target's revenue rose 12% to $12.21 billion, driven by a 5.9% gain in sales at stores open at least one year and credit card profit that jumped 31%. Steinhafel said same-store sales growth was driven by adult clothing, food and commodities.

Analysts surveyed by Thomson Financial expected earnings of 45 cents a share.

Also Thursday, department store operator Kohl's Corp. said profit rose 15% as it opened more stores and beefed up its fashion assortment with new labels.

The company, based in Menomonee Falls, Wis., said earnings in its fiscal third quarter ended Oct. 29 rose to $155.1 million, or 45 cents a share, from $134.6 million, or 39 cents. Revenue in the period rose 14% to $3.12 billion.

Target's shares gained $2.29, or 4%, to $58.85; Kohl's rose 71 cents to $49.12.

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