MINNEAPOLIS–Target recorded earnings declines in the second quarter, with the home department seeing traffic declines, executives said during a conference call.
Although the retailer is emphasizing its value offerings during this tepid economy, it will continue to invest in “affordable design,” and “content innovation,” such as the launch of a new line of tabletop and stationery from designer John Derain—known for his decoupage plates—next month, executives said.
Target also set plans to open temporary stores in Manhattan between Sept. 11 and 14 in the SoHo, East Village, Union Square and Midtown neighborhoods.
For the second quarter ended Aug. 2, net earnings fell to $634 million from $686 million.
In the retail segment, sales grew 5.7 percent to $15.0 billion in the year-ago period.
Comp-store sales declined 0.4 percent.
The pace of sales growth in the retail segment is Target’s “number-one challenge,” Doug Scovanner, chief financial officer, said during a call.
As a result, executives reiterated Target’s plan to play up the “pay less” part of its “expect more, pay less” message by amplifying the value equation.
Part of that plan calls for making sure price points are the same as Wal-Mart on identical products, executives said.
What’s more, Target is rolling out different presentations in low-volume stores and high-volume stores to boost its retail margins.
The retailer will open 70 to 75 new stores this year, a reduction from previous years.