Target 3Q profit grows, outlook cheery

MINNEAPOLIS (AP) — Target's third-quarter net income climbed 15%, helped by a gain related to the pending sale of its credit-card business.

Heading into the critical holiday shopping season, the Minneapolis company's outlook is well above analyst expectations.

Target (TGT) is optimistic about the period, which can make up 40% 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 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 that business for nearly two years, announced the deal last month.

Excluding certain items, the chain's earnings were 90 cents per share. Analysts expected 78 cents per share, according to a FactSet poll.

Revenue climbed 3% 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%, slower than last year's 4.3% 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.

Earlier in the day rival Wal-Mart Stores reported that its third-quarter net income climbed 9%, 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.