Target Sinks on Soft Guidance

Updated from 11:09 a.m. EDT

Target (TGT Quote) posted declines Tuesday 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 about 30.5 million shares of its common stock for a total investment of roughly $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."