MINNEAPOLIS—Expense controls steered Target to a 23 percent gain in third-quarter net income, which totaled $535 million.
Net sales were $15.2 billion, up 3 percent in the quarter, which ended on Oct. 30. Selling, general and administrative expenses increased 2.8 percent on a dollar basis and remained flat at 22 percent as a percentage of sales. The retailer also benefited from a 48 percent drop in credit-card expenses. Gross margin lost 20 basis points to finish the quarter at 30.6 percent.
Gregg Steinhafel, the company’s chairman, president and chief executive officer, said the third-quarter results have positioned Target for a strong holiday season. “Based on our merchandising and marketing plans, combined with the expected impact of REDcard rewards and our newly completed remodel program, we expect Target’s fourth-quarter comparable-store performance will be the best of any quarter in the last three years,” Steinhafel said.