MINNEAPOLIS -- Target Corp. here said its SuperTarget stores are achieving a return on investment comparable to the ROI at traditional Target discount stores.
more SuperTarget stores in October, with another eight planned for next March. "Although they represent only a small percentage of sales and income, we are pleased with their recent performance and satisfied we can leverage our expertise and improve the results as the store base grows," he said.
Steinhafel made his comments during a conference call with securities analysts last week following the release of Target's financial results for the second quarter and first half ended July 29, which showed increases in both sales and earnings.
Steinhafel said Target opened five SuperTargets in July -- in Ankeny, Iowa, and in Frisco, Hurst, Plano and Watauga, Texas.
The seven stores scheduled to open in October will be in Birmingham and Trussville, Ala.; Superior, Colo.; South Cedar Rapids, Iowa; Hulen and North Dallas, Texas; and Eau Claire, Wis.
The eight supercenters due in March will be located in Orlando, Fla.; Duluth and Woodstock, Ga.; Omaha, Neb.; Grand Forks, N.D. (the company's first North Dakota store); and Dallas, San Antonio and Sugarland, Texas.
Steinhafel said the SuperTargets focus on providing "differentiated upscale grocery offerings and competitive values."
The company said sales increased 7.3% to $8.3 billion for the 13-week second quarter and 7.8% to $16.0 billion for the half, while comparable-store sales rose 2% for the quarter and 2.5% for the half.
Net income was up 15% to $258 million for the quarter and 18.8% to $497 million for the half. The company said earnings were affected by a $1 million extraordinary gain in this year's second quarter and a $4 million extraordinary charge in last year's second quarter, both for debt extinguishment.
Bob Ulrich, chairman and chief executive officer, said the company "remains comfortable that we will deliver full-year results consistent with our stated goal of 15% average annual earnings per share growth."
During the quarter, the company said, it repurchased 7.7 million shares of its common stock, for a total of $229 million, at an average price of $29.67 per share. Since beginning the share-repurchase program in fiscal 1999, the company said, it has bought a total of 30.7 million shares at an average price of $30.75 per share, representing a total investment of $943 million.
The company operates 942 Target stores, including the 23 SuperTargets; 267 Mervyn's stores, and 64 department stores. Sales at Target stores rose 9.9% to $6.5 million during the quarter and 10.7% to $12.7 million for the half, while sales at both Mervyn's and the department-store segment declined during both periods.
