Ahead Of The Bell: Pershing-Target

Discounters, particularly Target's chief rival, Wal-Mart Stores Inc., have benefited from consumers switching to cheaper stores and focusing on necessities. But at Target, where more than 40 percent of revenue comes from nonessentials such as trendy fashions and housewares, the cheap-chic formula has become a drag as shoppers fixate on the lowest prices and forgo the extras. The company's credit card woes have also dragged down its profits.

Last week, Target announced that same-store sales or sales at stores opened at least a year rose 0.3 percent in April; Wal-Mart's same-store sales rose 5 percent. Same-store sales are considered a key indicator of a retailer's health.