Updated from 9:37 a.m. EDT
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
, a deal that will net the retailer $3.6 billion in cash.
Target Beats Estimates, Kinda
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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."
with its guidance for the second quarter and full year. During the company's conference call, Steinhafel said that Target's second-quarter earnings should be "somewhat softer" than Wall Street's current expectation that the company will earn a profit of 78 cents a share.
Steinhafel added that the Thomson Reuters average estimate for full-year earnings of $3.48 a share "lies within reasonable range of potential outcomes." That estimate has dropped 1% over the last month as analysts have ratcheted back expectations.
Following these comments from Steinhafel, shares of Target gave up early gains and were down 40 cents, or 0.7%, to $54.52.
put the blame for its dim second-quarter forecast on higher transportation and utility costs, as well as the usual culprit of uncertain economic conditions. This came even as the world's largest retailer reported a first-quarter profit of 76 cents, which was a penny better than expectations.
If the signs of weakness out of Wal-Mart weren't enough to sink optimism, in the last few days retailers
have also had a part in disappointing Wall Street with grim forecasts for the coming quarters.
slipping first-quarter comparable store sales and profit on Tuesday.