Target posts 53% rise in Q4 profit

Minneapolis Target Corp. said Tuesday that its profit in the fourth quarter increased 53.7% to $936, compared with $609 million a year ago.

The retailer credited lean inventory and stronger-than-expected holiday sales for the results.

Revenue rose 3.2% to $20.18 billion, better than the Street estimates. Same-store sales rose 0.6%.

In a statement, Gregg Steinhafel, Target's chairman, president and CEO, said he expects the company will be able to take market share and see increases in sales of discretionary items as it benefits from new merchandising initiatives, as well as a continued "modest" economic recovery.

Last year, Target's quarterly profit fell nearly 41% as it cut prices to clear holiday merchandise and lost money in its credit-card segment as shoppers fell behind on payments.

Since then, Target has reduced inventory and increased its focus on food and pharmacy items to appeal to frugal shoppers. It is also offering to match competitors' prices.

The company is also rolling out a new store format starting in April that will feature spruced up home-furnishings offerings, larger grocery sections, and feature better video games displays.

Like Walmart, Target also has plans to open smaller stores in urban markets.