New York City Target Corp. posted a 7.6% drop in second-quarter profit Tuesday as its customers focused on necessities and had trouble making their monthly credit-card payments.
The company also said it had seen an erratic start to the back-to-school season and that it would open new stores at a slower pace in fiscal 2009 amid the uncertain economy.
Target said it earned $634 million for the three-month period ended Aug. 2, down from $686 million a year earlier. Sales grew 5.7% to $15 billion from $14.2 billion. Same-store sales slipped 0.4%.
"The customer is very cash-strapped right now and in some ways, our greatest strength (has) become somewhat of a challenge," Target's president and CEO Gregg Steinhafel told investors during a conference call. "During these tough times, some of our consumers don't want to be tempted as much as they have in the past."