MINNEAPOLIS — Target Corp. here on Wednesday said profits were up in the fiscal first quarter on strong performance in the credit-card division, although the soft economy and weakness in seasonal merchandise sales crimped retail sales growth.
Retail comparable-store sales rose 2%, as previously reported. The company said adverse weather might also have contributed to the sales weakness.
"Guests were cautious in their behavior as they faced continued economic head winds, including near record-high prices at the gas pump," said Gregg Steinhafel, chairman, president and chief executive officer, Target. "As a result, food and commodity categories performed well, while we experienced less consistent patterns, including some sales declines, in the rest of the store."
The company's P-Fresh remodels, which include more extensive grocery offerings in its traditional discount stores, are still driving "meaningful increases in traffic and sales," he said, noting that traffic is up 6% in stores a year after remodels are completed.
The company now has 550 P-fresh remodels completed and 300 more slated for completion by the end of October.
Overall net income in the quarter, which ended April 30, was up 2.7%, to $689 million, on a 2.8% increase in revenues, to $15.9 billion.