America’s second-largest discount retailer Target last week reported a rise in margins and a strong performance thanks to its credit card business. Third-quarter earnings from operations rose by almost 35 percent and a hike in comparable store sales of 5.9 percent.
However, the company refused to adjust the operating margins upwards, preferring to remain cautious for the holiday shopping season. Retailers expect a busy holiday shopping period, reports the FT. This period accounts for most of their annual revenues, but last year, heavy competition with rivals like Wal-Mart cut into Target’s profits.
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Meanwhile earnings from continuing operations for the quarter hit $435 million (£249 million), up from $324 million last year. Net income dropped 18 percent to $435 million from $531 million last year when Target sold its Mervyn’s chain. However, total revenues for the quarter rose 11.9 percent to $12.2 billion, compared with $10.9 billion last year.