MINNEAPOLIS — Target Corp. here yesterday said it plans to “aggressively test” an expanded food offering in its discount stores despite a $1 billion reduction in capital spending for 2009.
“We are going to continue to push and test aggressively a multitude of food expansions in remodels and other test stores to make sure that we fairly understand where it works and where it doesn’t work,” said Gregg Steinhafel, president and chief executive officer, in a conference call discussing third-quarter results. He also said it was too early to assess the results of a small test of the expanded food offering near the company’s headquarters here.
Food and HBC continue to be fast-growing areas for the chain: Combined, they had sales growth of about 10% in the quarter, said Douglas Scovanner, executive vice president and chief financial officer. The company said the increased consumables mix put pressure on margins, although overall gross margins were still up 52 basis points.
Net income fell 23.8% in the quarter, which ended Nov. 1, to $369 million, on revenue growth of 1.9%, to $15.11 billion. Same-store sales were down 3.3%. Year to date, net income fell 11.9%, to $1.6 billion, on revenue gains of 4.4%, to $45.39 billion.
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