Flooring News and Information

Minneapolis, MN, Aug. 22�Strong sales from its Target Stores discount chain gave Target Corp. profits of 5% in the second quarter despite weak results from its Marshall Field's department stores. The retailer, which also operates Mervyn's, reported earnings of $271 million, or 30 cents a share, for the quarter ended Aug. 4, up from $258 million, or 28 cents a share from the same period last year. Revenue rose 8.5% to $8.95 billion from $8.25 billion a year ago.

Sales at Target Stores open longer than a year were up 3% during the quarter. 77 new Target Stores were opened in the second quarter to boost total sales for the division by nearly 12%.

Sales at Marshall Field's dropped 8% and pretax profits declined more than 56%. Mervyn's sales were off 1% but pretax profits rose 9.5%.

�Overall, the Target division had a strong performance in the quarter. It's just a matter if they can ever get Mervyn's and Marshall Field's to click at the same time at the positive end. That would be fantastic,� said Steve Paspal, an analyst with Sovereign Asset Management, a subsidiary of John Hancock Funds.

�The department store is a tough environment. Kohl's is the only one that's really having a lot of success,� Paspal said. �With the softening economy, people become more value-conscious.�

The economy also affected sales in Target stores, with consumers moving toward lower priced merchandise.

�You go to buy the $3 wastebasket instead of the $8 wastebasket,� Paspal explained. He said that has been evident across the retail industry.

Nonetheless, Bob Ulrich, Target's chairman and chief executive, said the company was pleased with second quarter results.

�We remain comfortable 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% or more,� Ulrich said.

For the first half of the fiscal year, Target earned $525 million, or 58 cents a share, compared with $497 million, or 54 cents a share, a year earlier. Revenues rose to $17.30 billion, from $16.0 billion.