NEW YORK - Fresh Falling in his company helped credit card income net in the first quarter of target Corp. up 2.7%, even though the company said prices for gas and food hikes made its buyers cautious.
Target shares fell more than 2% on Wednesday afternoon after the leaders of the company refers to analysts in a conference call morning that the chain of discount may not be able to meet projected revenue of Wall Street because of higher than expected costs associated with its Canadian expansion. Actions of some, recovered close to $49.96, 82 cents, or 1.6%.
But the economic uncertainty is also tempering outlook of the target.
"While the US economy is showing signs of improvement, we expect the recovery will continue to be slow and uneven, particularly for household income," Gregg Steinhafel, CEO, Chairman and President, said during a conference call with analysts.
Target said it earned 689 million, or 99 cents per share, for the three months ended April 30. That compares to $ 671 million, or 90 cents per share, in the same period last year.
Total revenues increased by 2.2% to 15.93 billion. Revenue at stores open at least a year increased by 2%. The gauge is considered an important indicator because it excludes stores that recently opened or closed.
Analysts expected earnings of 95 cents on revenue of $ 15.99 billion, according to FactSet.
"Our financial results for the first quarter was the result of profitability, stronger than expected in our credit card segment, offset the impact of sales lower than expected in our segment of the retail," Steinhafel said in a statement.
Enterprise target credit card, which is using the company to boost sales this year with a discount of 5% for its brand of debit and credit card holders, would cancel less money to account for card holders who did not pay their bills.
Steinhafel note that shoppers remain "prudent" their spending.
He said investors calling that increase revenues of the target continues to be "the priority challenge and a greater number. The company has relied on two major initiatives: most large grocery items and 5% discount. But quarterly client account fell, and - without traffic fed by these successful initiatives - income would have been flat.
In fact, responsible for the target noted that the best response of the discount of 5% came from revenue higher shoppers, those who are most discounters - and nation - average income of households of approximately $60,000 per year. One might think that the lower income shoppers had not enough money to spend more of it to the target, including on non-essential elements such as his clothes at moderate prices.
The rebate program, which shoppers used on about 7 to 8% of the total sales of the target, is "still small enough that it is not"change or hide all of the underlying trends,"says Doug Scovanner, Chief Financial Officer.
The company said each shopper in the quarter has purchased items from 4.4 per cent more than a year earlier and paid approximately 2.6% less on average for each element.
As in many other retailers, target has responded to the rising costs of cotton and work in China by increasing its prices on the selected mode and furnishings. But his greater increase will come this fall, when it plans to increase prices of more than 10 percent for a wider variety of clothing and home furnishings, according to Kathy Tesija, executive vice president of merchandising, said Wednesday.
In January, target said trying to sell its credit card business, where quarterly profit increased to $ 151 million, against $ 39 million, as bad bad debt decreased by $ 83 million284 million in the same period last year.
The company said expenses linked to its expansion to the Canada, where it plans to open 100 to 15 stores by 2013 and 2014, will amount to 16 cents to 20 cents per share for the year thus 4.24 analysts forecast $ by action may be too high. In February, target the estimated costs to 10 cents per share.
The company said that it still expects income year-round in stores open at least a year increased 4% to 5%, even if it is faced with pressure to meet this goal because of sluggish sales in the first quarter.
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