Target Outlook Off Kilter

Updated from 9:37 a.m. EDT

Target (TGT Quote) posted drops in comparable store sales and profit in the first quarter and disappointed with its outlook, continuing a recent trend for retailers.

The Minneapolis, Minn.-based retailer earned $602 million, or 74 cents a share, falling from a year-ago profit of $651 million, or 75 cents a share. Still, results beat the Thomson Reuters average estimate for a profit of 71 cents a share.

Overall sales grew 5% from last year to $14.3 billion, although comparable store sales slipped 0.7% compared to a year ago. Wall Street had expected Target to post revenue of $14.9 billion in the quarter.

"Our first quarter earnings per share met our expectations despite softer-than-expected sales performance," President and CEO Gregg Steinhafel said in a statement. "Though the current economic environment remains challenging, we will continue to generate long-term value for our shareholders by remaining focused on the disciplined execution of our strategy

Target also said it closed a transaction to sell an undivided interest in roughly 47% of its credit card receivables to JPMorgan Chase (JPM Quote), a deal that will net the retailer $3.6 billion in cash.

Target Beats Estimates, Kinda

The company also said that In the first quarter, under the share repurchase program announced in November 2007, Target repurchased approximately 30.5 million shares of its common stock for a total investment of approximately $1.6 billion.

Steinhafel said that Target shareholders "will benefit over time from our significant share repurchase activity and the unique relationship that has been created through this innovative agreement with JPMorgan Chase."