Updated from 8:46 a.m. EST
posted a 78% jump in third-quarter profit, helped by a gain on the sale of its Mervyn's chain, but the discount retailer missed earnings estimates by a penny on an operating basis.
Its net income reached $537 million, or 60 cents a share, compared with $302 million, or 33 cents a share, in the year-ago quarter. Those results include earnings from discontinued operations of $4 million and a gain of $203 million, or 23 cents a share, related to the sale of its Mervyn's unit.
Based on continuing operations, the company earned 37 cents a share, vs. 30 cents a share in the year-ago period. Analysts expected a profit of $353.6 million, or 38 cents a share, according to Thomson First Call.
Target shares were recently down 42 cents, or 0.8%, to $50.46.
For the quarter, Target's total sales rose 11% to $10.91 billion, edging past the consensus estimate of $10.86 billion. Same-store sales, or sales at stores open for at least a year, rose 4.5%. Sales were boosted by the company's credit card operation, which increased 5.5% to $290 million.
"We are pleased with our strong growth and continued market share gains during the third quarter, particularly in light of last year's solid sales and earnings performance," the company said.
Target sold its Mervyn's unit for $1.65 billion on Sept. 2. The retail operations were acquired by a consortium of investors, while some stores in Minnesota were sold to
May Department Stores
During the quarter, Target repurchased 11.4 million shares at an average price of $44.16 a share for $503 million. Since it announced its $3 billion repurchase plan in June, it has bought back 22.4 million shares of its common stock, reflecting a total investment of $975 million.