Hitting the Target

Target Corp. (Minneapolis) reported first-quarter net income up 6.3percent to $254 million. Though this increase falls short of last year's23 percent gain, Target continues to succeed amid a struggling economy.

The retailer's revenue also rose 7.7 percent to $8.35 billion from $7.75billion, due in part to the company's 11 percent revenue increase at itsdiscount stores. Same-store sales increased 1.7 percent. According tothe company, the well-advertised Mossimo clothing line helped boostsales at Target.

Addressing rival Kmart's new “BlueLight Always” program, which loweredprices on selected merchandise, Target's chairman and ceo Robert Ulrichsaid, “They're just really trying to get more competitive, and that isjust fine.” Ulrich stated that rival retailers would also lower and cuttheir prices if the Kmart Corp. (Troy, Mich.) sparked a “price war.”

The Target Corp. also operates Mervyn's, a moderate-priced apparelchain, and Marshall Field's department stores, which recently reported apoor first quarter. Same-store sales dropped 4.5 percent while totalsales fell 4.2 percent. Target plans to cut some inventory at smallerMarshall Field's stores and mark down merchandise more quickly.

The retailer predicts an increase for the second quarter as well, due inpart to the fact that bargain stores continue to succeed in comparisonto the falling sales at most department stores.