Target Corporation saw third quarter profits soar before the anticipated retail frenzy on Black Friday 2010. The leading mass merchant experienced a jump in revenue, improved credit card business and strong growth for the quarter.
Target Corp. (TGT) reported a profit of $535 million, or 74 cents a share, for the period that ended October 30, 2010. This time last year, Target was at 58 cents a share with a profit of $436 million. What is keeping Target afloat and progressive during tough economic times?
The Wall Street Journal reports Target Corporation has remodeled stores and put an emphasis on groceries to boost sales. The leading retailer also entices customers to visit other areas of the store containing more profitable merchandise such as clothing.
Target Chief Executive Gregg Steinhafel said their credit card promo starting in October is very popular. Customers paying with a Target debit or credit card or Target Visa receive a 5 percent discount on all purchases.
According to analysts, Target prices are cheaper than rival Walmart when using a card. On Tuesday, Walmart (WMT) reported third quarter earnings internationally increased by 9.3 percent with US same-store sales falling for the sixth quarter in a row.
One concern is whether Target consumers are paying off their charges. The 90-day delinquency rate dropped to 3.5 percent from 4.6 percent. Most people are paying off their Target credit card bills.
The credit card strategy was profitable for Target Corporation during the third quarter. It should prove to be profitable through Black Friday and the holiday shopping season as Target takes an upbeat look for the holidays.
According to WSJ MarketWatch, Steinhafel stated, “We are well-positioned for the fourth quarter.” The vast attention paid to Target Black Friday ads indicates a potentially profitable holiday season for the mass merchant.
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