NEW YORK ? Target Corp. reported a 3.7 percent increase in third-quarter profits, helped by solid spending and improvement in its credit card business.
The Minneapolis discounter said Wednesday that it earned $555 million, or 82 cents per share, in the three-month period ended Oct. 29. That compares with $535 million, or 74 cents per share, in the year-ago period. Revenue rose 5.4 percent to $16.05 billion. Analysts had expected 74 cents per share on revenue of $16.31 billion, according to FactSet.
Revenue at stores opened at least a year ? an indicator of a retailer's health ? rose 4.3 percent in the quarter.
"We're very pleased with our third-quarter financial results," said Gregg Steinhafel, Target's chairman, president and chief executive in a statement. "We're confident that we have the right strategy and team in place to drive continued strong performance this holiday season and well into the future."
Target, which has carved a niche as a cheap chic discounter, took a hit when the economy went into free fall because about 40 percent of its sales come from essentials such as groceries. But Target's sales have rebounded as its expanded its offerings of food and emphasized its low prices in advertising. The retailer is also wooing shoppers with a 5 percent discount program it launched in October 2010 for customer who pay with Target branded credit and debit cards.
Target said Wednesday that its third-quarter average receivables for its credit card segment declined 9.9 percent to $6.2 billion in 2011 from $6.9 billion in the same period a year ago. Bad debt expense was $40 million during the third quarter, down from $110 million in the year-ago period.
Target said that it expects earnings per share for the fourth quarter to be in the range of $1.43 per share to $1.53 per share. Analysts expect $1.47 per share.
Target's shares rose about 2 percent, or $1.24 per share, to $54.42 in trading.
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