Updated from 9:12 a.m. EDTShares of Target ( TGT) were outperforming the broader market after the company posted a huge increase in quarterly profit thanks to the sale of its Marshall Field's department store chain. The company was also upbeat on a conference call, listing off several new initiatives to drive growth. The company also said the Thomson First Call third-quarter earnings-per-share estimate is a "reasonable expectation." Shares of the company were lately up $2.19, or 5.4%, at $42.61. Earlier, the company said net income in the period ended Aug. 2 was $1.416 billion, or $1.54 a share, compared to $358 million, or 39 cents a share, in the year-earlier period. Results included a gain of $1.11 a share from the sale of Marshall Field's to May Department Stores ( MAY), which was finalized on July 31. The latest quarter also showed earnings from continuing operations of 40 cents a share -- which included a loss of 5 cents a share from the repurchase of $455 million in debt -- and earnings from discontinued operations of $31 million, or 3 cents a share. Discontinued operations are now Mervyn's and Marshall Field's. Total sales were up 10% at $10.56 billion, up from the prior year's $9.6 billion. Same-store sales increased 3.9%. Analysts' consensus was for a profit of 47 cents a share on sales of about $12 billion. Target said earnings before interest and taxes were $795 million, up 16.4% from the prior year's $685 million. The company's credit card division added $120 million to earnings before taxes. Gross margin in the latest quarter jumped 99 basis points, the company said, citing improvement in both merchandise mark-up and markdown rates. Selling, general and administrative expenses, however, increased 63 basis points. Target cited in part higher worker's compensation costs. Target reiterated that its July 29 announcement to sell 257 Mervyn's stores to a group of investors and Mervyn's credit card receivables to General Electric's ( GE) Consumer Finance division is still expected to close in the third quarter. Consequently, it expects to have a pretax gain of $270 million, or 18 cents a share.