MINNEAPOLIS, Wed May 16, 2012 – Target Corp. raised its annual earnings forecast after posting a bigger-than-expected rise in quarterly profit, even as it spends more on plans to open stores in Canada and has concerns about U.S. shoppers’ ability to spend.
The discount chain expects economic uncertainty to continue for the rest of 2012, Chairman and Chief Executive Gregg Steinhafel said on Wednesday.
Shares of Target were up 31 cents to $55.39 in midday trading after rising as high as $56.44 earlier in the session.
“Consumers are not buying more at Target. What’s driving their sales is maybe people are shopping a bit more often,” said Brian Sozzi, chief equities analyst at NBG Productions. “It’s not like people are going in and loading up their baskets as much as they were a couple of years ago.”
Target said it expects sales at stores open at least a year, or same-store sales, to rise about 3 percent this quarter and 3 percent or a little more for the full year. Last year same-store sales rose 3 percent.
Target, which sells basic goods such as soap and paper towels along with limited-edition items from the likes of designer Jason Wu, has been seeing more customers shop using its credit cards, which offer a 5 percent discount and free online shipping.