Target Corp. said Wednesday its board approved the increase of its quarterly dividend by 6 cents, or 20 percent, to 36 cents.
The Minneapolis-based discount chain will pay the dividend on Sept. 10 to shareholders of record as of Aug. 15.
Target Corp. has paid a dividend every quarter since going public in 1967.
The announcement was made ahead of its annual shareholders' meeting, which will take place on Wednesday at a new store in Chicago.
Like most retailers, Target has had the challenge of trying to find ways of luring cautious U.S. shoppers into stores amid a flood of mixed economic news that has them scrutinizing every purchase. The job and housing markets are still shaky, but falling gas prices have given consumers hope.
Target, which mixes stylish clothes and trendy decor under the same roof as toothpaste and cereal, recently has had success drawing customers into stores with two growth initiatives. It has been offering a larger selection of food, and it launched a program in 2010 that gives shoppers a 5 percent discount when they pay with Target-branded credit and debit cards.
The retailer, which operates 1,763 stores across the U.S., reported last month that its first-quarter profit rose 1.2 percent to $697 million, or $1.04 per share, in the quarter ended April 28. Excluding costs associated with its expansion into Canada next year, the per-share results would have been $1.11. Revenue rose 5.9 percent to $16.86 billion.
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.
Based on the better-than-expected results, Target raised its full-year profit guidance last month by 5 cents. Target now expects to earn $4.60 to $4.80 per share.
In afternoon trading, Target shares rose 20 cents to $58.36, the high end of its 52-week per share range of $45.28 to $59.40.