Target Corp. (Minneapolis) reported a slight drop in third-quarter results from a year ago. Third quarter net earnings were $216 million, down from $241 million in 1999, but both were before extraordinary charges for debt extinguishment (a $1 million charge in the current quarter and a $9 million charge in third-quarter 1999).
"Our third-quarter results reflect the strength of last year's performance, particularly at Target Stores, and are in line with our most recent guidance," said Target Corp. chairman and ceo Bob Ulrich. "Similarly, our current outlook for the holiday season is consistent with our expectation of low double-digit growth in EPS for the full year. Over the long-term, we remain confident in our ability to achieve average annual earnings per share growth of 15 percent or more."
For the nine-month period of 2000, net earnings were $712 million, an increase of 7 percent compared with $663 million in the first nine months of 1999. Total revenues in the third quarter increased 8.3 percent to $8.582 billion from $7.927 billion in 1999, driven by a 10.5 percent revenue increase at Target Stores. Comparable-store sales for third quarter 2000 increased 2.9 percent. But the third-quarter gross margin rate was unfavorable to last year, principally due to higher markdowns at both Target Stores and Department Stores. Operating expense rate was also unfavorable, reflecting lack of sales leverage.
Target Corp. operates 1309 stores in 46 states. This includes 978 Target stores, 267 Mervyn's stores and 64 Department Stores (Dayton's, Hudson's and Marshall Field's).