Target Profit Flat in Second Quarter
MINNEAPOLIS-Target reported net income of $704 million in its fiscal second quarter, exactly the same bottom-line total in the second quarter of last year.
Added expenses offset a 3.5 percent gain in net sales, which totaled $16.5 billion in the quarter, which ended on July 28. The sales pickup included a same-store sales increase of 3.1 percent. A Target statement said the company saw its gross margin fall 27 basis points to 31.3 percent, which owed to the impact of its integrated growth strategies. Also, selling, general and administrative expenses rose 3.3 percent in dollars, although as a percentage of sales SG&A slipped four basis points to 21.8 percent.
Gregg Steinhafel, Target's chairman, president and CEO, said the retailer is maintaining "a continued focus on delivering an outstanding experience for our guests and disciplined execution of our strategy." Steinhafel further noted that the second quarter saw the opening of the first three CityTarget locations in Seattle, Los Angeles and Chicago, featuring the smaller Target format announced early last year. He said the company was "very pleased" with the first response by shoppers to the new format.