Target Net Falls 5.2 Percent in Fourth Quarter
MINNEAPOLIS-Rising expenses slimmed Target's fourth-quarter net income by 5.2 percent to $981 million, bringing the mass merchant's fiscal year to a close with $2.9 billion in net income, about flat with last year's bottom line.
The company's gross margin for the quarter, which ended on Jan. 28, slipped 28 basis points to 28.4 percent. Selling, general and administrative expenses rose 4.2 percent in dollars and 16 basis points as a percentage of sales, to 18.5 percent.
These items offset a 3.3 percent increase in net sales in the quarter, to $20.9 billion, which included an increase of 2.2 percent in same-store sales. For the fiscal year, net sales rose 4.1 percent to $68.5 billion, including a 3 percent pickup in same-store sales.
Gregg Steinhafel, Target's chairman, president and CEO, said the retailer overcame "sluggish economic growth, restrained consumer spending and an intensely promotional holiday season" to deliver what he described as a "strong financial performance" in 2011. Looking ahead, Steinhafel said Target would continue its focus on its "Expect More. Pay Less" brand promise, and would keep investing in its store, online and mobile channels.
Steinhafel also said this year will bring the opening of the first CityTarget locations, in July, while the opening of its first Canadian Target stores is still on track for early next year.