TARGET CORP Quarterly Report for Q3 Ended Oct 31, 2009

Summary

Target Corporation's fiscal third quarter results for the period ending October 31, 2009, indicate a challenging economic environment impacting consumer spending. While overall revenues saw a slight increase year-over-year, net earnings experienced a modest rise to $436 million from $369 million in the prior year's comparable quarter. The company maintained a disciplined approach to expenses, which, combined with improved gross margin rates, helped offset a slight decrease in comparable-store sales. The credit card segment, despite a challenging consumer credit environment, demonstrated stability and modest profitability. The company ended the quarter with a solid cash flow from operations, supporting its financial obligations and dividend payments. Management expressed cautious optimism for the fourth quarter, anticipating profit growth driven by easier year-over-year comparisons and strategic adjustments in the credit card segment.

Key Highlights

• 1Total revenues increased slightly to $15.28 billion for the third quarter of fiscal 2009, up from $15.11 billion in the same period last year.
• 2Net earnings for the third quarter were $436 million, or $0.58 per diluted share, compared to $369 million, or $0.49 per diluted share, in the prior year's quarter.
• 3Comparable-store sales decreased by 1.6% for the third quarter, indicating ongoing consumer caution.
• 4The company's gross margin rate improved to 30.8% from 30.6% in the prior year's quarter, driven by better markdown performance and lower transportation costs.
• 5Selling, general, and administrative (SG&A) expenses as a rate of sales improved to 21.9% from 22.1%, reflecting productivity gains.
• 6Cash flow provided by operations was a strong $3.03 billion for the first nine months of the fiscal year.
• 7The company declared a dividend of $0.17 per share for the quarter, demonstrating a commitment to returning capital to shareholders.

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