MINNEAPOLIS – Target, the American retail giant that is coming to Canada next year, says its net income climbed 15 per cent in the third quarter, helped by a gain related to the pending sale of its credit-card business to a big Canadian bank.
Heading into the critical holiday shopping season, the Minneapolis company’s outlook is well above analyst expectations.
Target, which plans to open up to 135 stores in Canada beginning in 2013, said it is optimistic about the holiday period, which can make up 40 per cent of a retailer’s annual revenue.
The cheap-chic chain cites its new price matching program and a holiday collection partnership with luxury department store Neiman Marcus.
For the three months ended Oct. 27, Target Corp. earned $637 million, or 96 cents per share. That’s up from $555 million, or 82 cents per share, a year earlier.
The current quarter’s performance included a 15-cent gain tied to the retailer’s sale of its consumer credit-card business to TD Bank Group.
Target, which had been looking for a buyer for nearly two years, announced the deal last month.
Removing certain items, the chain’s earnings were 90 cents per share. Analysts expected 78 cents per share, according to a FactSet poll.
Revenue climbed three per cent to $16.6 billion from $16.05 billion, but missed Wall Street’s $16.91 billion forecast.
Revenue at stores open at least a year, a key retail metric, rose 2.9 per cent, slower than last year’s 4.3 per cent increase. This figure excludes results from stores recently opened or closed.
For the fourth quarter, which includes the key holiday shopping season, Target anticipates adjusted earnings of $1.64 to $1.74 per share. Analysts predict $1.50 per share.
Target’s stock added 72 cents, or 1.2 per cent, to $62.10 in premarket trading Thursday.
Earlier in the day rival Wal-Mart Stores Inc. reported that its third-quarter net income climbed 9 per cent, but sales missed Wall Street’s expectations. The world’s biggest retailer narrowed its earnings guidance for the year and issued a fourth-quarter profit outlook that’s below analysts’ forecast.