Summary
Target Corporation's (TGT) third quarter ended October 30, 2010, showed a mixed financial performance. The Retail Segment experienced a modest sales increase of 3.0%, driven by a 1.6% comparable-store sales increase and new store contributions. Despite this top-line growth, profit margins in the Retail Segment remained relatively stable. In contrast, the Credit Card Segment saw a significant increase in segment profit, primarily due to a substantial decrease in bad debt expense, reflecting improved credit trends. However, overall credit card revenues declined due to lower average receivables and reduced late fees. The company also actively engaged in its share repurchase program, demonstrating a commitment to returning value to shareholders, and initiated a new 5% REDcard rewards program aimed at driving incremental sales and customer loyalty.
Financial Highlights
48 data points| Revenue | $15.61B |
| Cost of Revenue | $10.56B |
| Gross Profit | $5.04B |
| SG&A Expenses | $3.35B |
| Operating Income | $947.00M |
| Interest Expense | $194.00M |
| Net Income | $535.00M |
| EPS (Basic) | $0.75 |
| EPS (Diluted) | $0.74 |
| Shares Outstanding (Basic) | 715.40M |
| Shares Outstanding (Diluted) | 721.00M |
Key Highlights
- 1Total revenues increased to $15.6 billion for the third quarter of 2010 from $15.3 billion in the prior year's comparable period.
- 2Net earnings for the third quarter of 2010 rose to $535 million, or $0.74 per diluted share, compared to $436 million, or $0.58 per diluted share, in the third quarter of 2009.
- 3The Retail Segment's sales grew by 3.0% to $15.2 billion, with comparable-store sales increasing by 1.6%.
- 4The Credit Card Segment's profit significantly increased to $130 million from $60 million, largely driven by a substantial decrease in bad debt expense.
- 5Target repurchased approximately 15.2 million shares of common stock for $793 million during the third quarter of 2010.
- 6The company launched a new 5% REDcard rewards program in October 2010, replacing the previous points-based system, aimed at simplifying the program and driving incremental sales.
- 7Inventory levels increased to $9.55 billion from $9.38 billion at the end of the prior fiscal year, reflecting inventory to support higher retail square footage and strategic initiatives.