Target Same-Store Sales Top Estimates

Thursday, October 27th 2005, 9:40 am
By: News On 6

MINNEAPOLIS (AP) _ Target Corp., the second largest discount chain in the U.S. behind Wal-Mart, on Thursday said sales at stores open at least one year rose a better than expected 5.7 percent in October, and reaffirmed its earnings outlook for the second half of the fiscal year.

The company has previously forecast same-store sales would rise 3 percent to 5 percent. Analysts were expecting, on average, an increase of 4.7 percent.

Target said total sales rose 11.6 percent in October to $3.69 billion.

The company also confirmed that it will receive at least $27 million as its ultimate share of proceeds from a $3 billion antitrust litigation settlement with Visa/Mastercard. Target said these proceeds will boost third-quarter earnings by 2 cents per share.

Target said same-stores sales rose 4.5 percent for the recently completed third quarter, while total sales increased 11.7 percent to $11.86 billion. Target the strong sales growth and profit margin expansion seen in the third quarter ``combined with our more modest outlook for earnings growth in the fourth quarter'' makes it confidence it can achieve earnings of $1.50 per share for the second half of the fiscal year ending in January.

The company earned $1.17 per share for the first six months of fiscal 2006. Analysts are expecting the company to earn $2.68 for the year, meaning the company would have to post second-half profit of $1.51 to match Wall Street's target.