MINNEAPOLIS — Target Corp. here said its investment in Canada resulted in a decline in net income for the third quarter and nine-month period that ended Nov. 2, while sales advanced.
Net income for the quarter fell 46.4% to $341 million and sales increased 4% to $17.3 billion; for the year-to-date net income declined 28.8% to $1.5 billion, while sales were up 3% to $51.1 billion.
In its U.S. segment, Target said sales rose 2% to $16.9 billion for the quarter, including an increase of 0.9% in comparable-store sales, while sales in the new Canadian segment were $333 million. For the nine-month period U.S. sales rose 1.6% to $50.4 billion, including a comp-store increase of 0.5%, while Canadian sales were $694 million.
According to Gregg Steinhafel, chairman, president and chief executive officer of Target, "Third-quarter financial results reflect continued strong execution in our U.S. segment in an environment where consumer spending remains constrained. In our Canadian segment we are focused on improving performance as we transition from opening to operating our 124 stores."
Read more: Target Sets Final Canada Conversions for 2013
John J. Mulligan, executive vice president and chief financial officer, said U.S. comp trends were softer than expected in October "as consumers witnessed the dysfunction in Washington. However, this weakness was offset by the calendar shift, which moved a meaningful amount of Halloween sales into the third quarter."
He also said transactions in the quarter were down 1.3%, which was "more than offset" by a 2.2% increase in average transaction size, "which was driven entirely by an increase in average retail per item, largely by electronics."
For the nine-month period transactions slipped 1.5%, while average transaction size rose 2.1%. He said Target is continuing to refine operations and improve performance in Canada, including making progress in rationalizing its inventory position, updating item counts in stores and distribution centers and improving network flow.
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