Target Corporation, a retailer of small appliances, clothing, and other home goods, reported earnings per share for the second quarter ended Aug. 2, 2003 of U.S. $0.39, compared with $0.38 in the second quarter ended Aug. 3, 2002. All earnings per share figures refer to diluted earnings per share. Second quarter net earnings increased 4.1 percent to $358 million, compared with $344 million in 2002.
"We are pleased with our second quarter performance for the corporation overall, driven by strong results at Target Stores despite a difficult comparison to a year ago," said Bob Ulrich, chairman and chief executive officer of Target Corporation. "We remain focused on achieving profitable market share growth by delivering both a clearly differentiated shopping experience and exceptional value to our guests."
Total revenues in the second quarter increased 9.1 percent to $10.984 billion from $10.068 billion in 2002, driven by an 11.3 percent revenue increase at Target Stores, principally resulting from new store expansion and the growth in our credit card operations. Comparable-store sales for the corporation in the second quarter 2003 rose 1.5 percent. (Total revenues include retail sales and net credit revenues. Comparable-store sales are sales from stores open longer than one year.)
For the quarter, pre-tax segment profit increased 1.0 percent to $793 million, compared with $785 million in the second quarter 2002. Pre-tax profit at Target Stores increased $41 million, or 5.7 percent. Pre-tax profit declined at both Mervyn's and Marshall Field's by $28 million and $5 million, respectively. (Pre-tax segment profit is earnings before LIFO, interest, other expense and unusual items.)
In the second quarter, the company said its gross margin rate was unfavorable to the prior year, principally due to the mix impact of more rapid growth at Target, the company’s lowest gross margin rate division. (Gross margin rate represents gross margin as a percentage of sales.) Expense rate, excluding credit card operations, was also unfavorable to prior year due to a lack of sales leverage at all three divisions. (Expense rate represents selling, general, and administrative expenses as a percentage of sales. It includes buying and occupancy, advertising, start-up and other expense, and excludes depreciation and expenses associated with credit card operations.)
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