Target yesterday beat Wall Street expectations when it delivered a 21.1 percent rise in quarterly earnings.
Gains in Target's credit card business, as well as both its Target Stores division and Marshall Field's stores, offset a small drop in pre-tax profit at the Mervyn's department store chain.
Target has cultivated a more upmarket and style-conscious image than other discount retailers. It is the third-largest general retailer in the US by revenues.
Target yesterday said it saw continued price pressure from rival Wal-Mart. For the fourth quarter, Target's profit rose to $832m, or 91 cents a share, compared with $6S8m, or 75 cents a share, a year ago. Analysts had expected Target to earn 87 cents a share, according to Reuters Research.
Revenues for the quarter rose 10.7 percent to $15.57bn from $14.06bn, while same-store sales -from stores open at least a year - rose 4.9 percent.
Target said pre-tax profit soared 18.5 percent at Target Stores. At the department stores, which have been ailing, pre-tax profit jumped 15.6 percent at Marshall Field's but fell 0.3 percent at Mervyn's. Credit card operations added $168m to pre-tax profit in the recent quarter, up 11.7 percent from a year ago.
For the full year, Target's profits were $1.84bn, or $2.01 a share, up 11.4 percent from $1.65bn, or $1.81 a share, the year before. Revenues rose 9.7 percent to $4S.16bn from $43.91bn, driven by new stores, a 2.9 percent rise in same-store sales and growth in credit revenues.