By ANNE D'INNOCENZIO, AP Retail Writer
NEW YORK (AP) -- Target Corp. reported a 1.2 percent increase in first-quarter profit and raised its earnings forecast for the full year due to strong sales of its food and cheap chic fashions.
Target's results illustrate that Americans are beginning to spend cautiously as economic uncertainty persists. The job and housing markets are still shaky has raised fears about a spring slowdown, but falling gas prices have given shoppers hope.
Target has found some success with drawing customers in with a larger selection of foods and a program it started in 2010 that offers a 5 percent discount for those who pay with Target-branded credit and debit cards.
"We remain confident in our strategy and operational plan but cautious about the macro environment," said Gregg Steinhafel, Target's chairman, president and CEO. "We believe the recovery will continue to be slow and uneven. As a result, we believe it's prudent to plan our business accordingly."
The retailer earned $697 million, or $1.04 per share, in the quarter ended April 28. That compares with $689 million, or 99 cents per share, in the year-ago period. Revenue rose 5.9 percent to $16.86 billion. Results beat the earnings of $1.02 per share on revenue of $16.83 billion analysts polled by FactSet were expecting.
Revenue at stores opened at least a year rose 5.3 percent, the strongest performance in six years for that period. The measure is considered a key indicator of a retailer's health.
The company is raising its full-year profit guidance by 5 cents. The company now expects earnings per share to be in the range of $4.60 per share to $4.80 per share. Analysts had expected $4.28 per share.
Target's stock rose $1.20, or more than 2 percent, to $56.28 in pre-market trading.
(MPR reporter Martin Moylan contributed to this report.)