Target profit rises 18% in Q3

Minneapolis Target Corp. on Tuesday said its third-quarter profit climbed 18% as it cut costs and performed better in its credit-card business. The chain reported net earnings of $436 million for the third quarter ended Oct. 31, compared with $369 million in the year-ago quarter. Still, it offered a conservative outlook for the holidays.

“In light of the current and projected economic environment and expectations for a highly promotional holiday season, Target remains cautious about fourth-quarter performance and is planning conservatively in both business segments,” the company said in a statement.

Sales edged up 1.4% to $14.8 billion in 2009 from $14.6 billion in 2008, due to new store expansion. At quarter-end, the company was operating 59 more stores than a year ago.

Comp-store sales declined 1.6% in the quarter. Credit-card segment profit in the quarter increased to $60 million from $35 million last year.

“Profitability in our retail segment during the third quarter was well above expectations, and credit-card segment profitability also improved due to continued thoughtful portfolio management in a challenging credit environment,” said Gregg Steinhafel, chairman, president and CEO, Target Corp.