Target Q1 profit up 2.7% on credit-card business gains
Minneapolis — Target Corp. on Wednesday reported that its net income in the first quarter rise 2.7% to $689 million, up from $671 million in the year-ago period. Its results, which beat Street expectations, were boosted by its credit-card business as sales came in weaker than expected.
Total revenue in the quarter, ended April 30, rose 2.2% to $15.9 billion.
Same-store sales rose 2%. Analysts expected revenue of $16.02 billion.
"Our first-quarter financial performance was the result of stronger-than-expected profitability in our credit-card segment, which offset the impact of weaker-than-anticipated sales in our retail segment," Gregg Steinhafel, Target’s chairman, president and CEO, said in a statement. He noted that shoppers remain "cautious" in their spending.
Target’s results came two days after hedge fund manager and activist investor William Ackman disclosed that he had sold his shares in the company.
In its credit-card sector, Target’s quarterly profit was $194 million, compared with $111 million in the last year’s quarter. Bad debt expense was $12 million in the period, down from $197 million in 2010.
Staples Q1 results weaker than expected
FRAMINGHAM, Mass. — Staples reported that total company sales for the first quarter of2011 increased 2% to $6.2 billion compared with the first quarter of 2010. Net incomefor the first quarter of 2011 increased 5% year-over-year to $198 million, and dilutedearnings per share, on a GAAP basis, increased 8% to 28 cents from 26 cents in the firstquarter of 2010.
“Our first quarter results show that we’re making good progress on our key growth initiativesand we’re gaining share in North America, but at a cost to our bottom line,” said Ron Sargent,Staples’ chairman and CEO.
Staples retail division reported first-quarter sales of$2.3 billion, an increase of 1%in U.S. dollars, and down slightly in local currency compared with the first quarter of 2010. First quarter 2011 comparable-store sales decreased 1% versus the first quarter of 2010,primarily reflecting a decrease in customer traffic in the Canadian Retail business, partiallyoffset by higher average order size.
Staples reported that international sales for the first quarter of 2011 were $1.3 billion, an increase of 4% inU.S. dollars, and a decrease of 2% in local currency compared to the first quarter of2010.
According to Staples, its results were weaker than expected, and as such it has adopteda more conservative sales and earnings outlook.For the second quarter of 2011, the company expects sales to be flat to slightly positive compared with thesame period of 2010 and expects to achieve diluted earnings per share on a U.S. GAAP basis in the range of 18 cents to 20 cents. For the full year 2011, Staples expects sales to increase in the lowsingle-digits compared with 2010 and to achieve diluted earnings per share on a U.S.GAAP basis in the range of $1.35 to $1.45.
Bath and Body Works announces CEO shift
COLUMBUS, Ohio— Bath and Body Works announced that it has named Nick Coe, formerly president of Lands’ End, as its new CEO. The current CEO of Bath and Body Works,Diane Neal, will remain in her role as CEO through summer and then transition into an advisory role with the company from San Francisco.
"Diane has done amazing things at Bath and Body Works. I truly appreciate her expertise as a leader and merchant," said Leslie Wexner, chairman and CEO of Limited Brands, Bath and Body Works’ parent company. "We think so highly of her work that we have asked her to stay connected with Bath and Body Works in an advisory capacity that leverages her unique skills while allowing her to return to San Francisco, a personal desire of hers."
Neal joined Bath and Body Works in November 2006 as president and COO and has served as CEO since 2007. Prior to joining Bath and Body Works, Neal held leadership positions at Gap and Target.
Prior to his career at Lands’ End, Coe held senior merchandising positions at Banana Republic and Levi Strauss.
"I am also very excited that we are welcoming Nick who has such an incredible track record as a merchant and leader," said Wexner. "He understands the centrality of the customer and has great admiration for the Bath and Body Works brand and team."