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Target, Mervyn's drive 2Q profits up by 5%

By Don Hogsett -- Home Textiles Today, 8/27/2001 12:00:00 AM

MINNEAPOLIS —

Second-quarter profits at Target Stores rose by 5.2 percent, to $271 million from $258 million last year, boosted by continued strength in its core Target Stores and a strong operating profit at Mervyn's.

Sales advanced by 8.4 percent, to $8.8 billion from $8.1 billion last year, with a solid 11.8 percent increase at Target Stores offsetting declines at Mervyn's and Marshall Field's.

Holding profits somewhat in check, average gross margin tightened by 40 basis points, to 30.7 percent from 31.1 percent a year ago, "reflecting both a modest decline in gross margin rate at Target and the mix impact of growth at Target, our lowest gross margin rate division," the retailer said.

Bob Ulrich, ceo, said, "We remain confident that we are well positioned to deliver reasonable growth in earnings per share throughout the remainder of 2001. Over the long term, we remain confident in our ability to achieve average annual earnings per share growth of 15 percent or more."

Target At A Glance
Results by retail segment (all figures, excluding %, in $x000)

Sales	2001 2Q	2000 2Q	% CHG
Target	$7,311,000	$6,541,000	11.8%
Mervyn's	933,000	940,000	-0.8
Marshall Field's	606,000	661,000	-8.2
Same-store sales	2001 2Q	2000 2Q	% CHG
Target	3.4%	3.1%	—
Mervyn's	-0.6	-1.1	—
Marshall Field's	-8.8	-6.6	—
Operating Profits	2001 2Q	2000 2Q	% CHG
Target	$522,000	$478,000	9.2%
Mervyn's	60,000	55,000	9.5
Marshall Field's	16,000	35,000	-56.4
Inventories	2001 2Q	2000 2Q	% CHG
Target	3,193,000	2,879,000	10.9
Mervyn's	587,000	588,000	-0.2
Marshall Field	393,000	429,000	-8.4

Target Corp.

Qtr. 8/4 (x000)	2001	2000	% CHG
a-Second-quarter and six-month results include a $1 one-time charge stemming from the early retirement of debt, compared with a prior-year credit of $1 million.
Sales	$8,952,000	$8,251,000	8.5
Oper. income (EBIT)	548,000	518,000	5.8
Net income	271,000^a	258,000^a	5.2
Per share (diluted)	0.30	0.28	5.9
Average gross margin	30.7%	31.1%	—
SG&A expenses	23.2%	23.5%	—
Six months
Sales	17,003,000	15,736,000	8.1
Oper. income (EBIT)	1,064,000	1,003,000	6.1
Net income	525,000a	497,000	5.6
Per share (diluted)	0.58	0.54	—
Average gross margin	31.1%	31.4%	—
SG&A expenses	23.5%	23.8%	—

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