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Target Stores

By Lauren Foster

Target yesterday beat Wall Street expectations when it delivered a 21.1 percent rise in quarterly earnings.

Gains in Target's credit card business, as well as both its Target Stores division and Marshall Field's stores, offset a small drop in pre-tax profit at the Mervyn's department store chain.

Target has cultivated a more upmarket and style-conscious image than other discount retailers. It is the third-largest general retailer in the US by revenues.

Target yesterday said it saw continued price pressure from rival Wal­Mart. For the fourth quarter, Target's profit rose to $832m, or 91 cents a share, compared with $688m, or 75 cents a share, a year ago. Analysts had expected Target to earn 87 cents a share, according to Reuters Research.

Revenues for the quarter rose 10.7 percent to $15.57bn from $14.06bn, 35 while same-store sales - from stores open at least a year - rose 4.9 percent.

Target said pre-tax profit soared 18.5 percent at Target Stores. At the department stores, which have been ailing, pre-tax profit jumped 15.6 percent at Marshall Field's but fell 0.3 percent at Mervyn's.

Credit card operations added $168m to pre-tax profit in the recent quarter, up 11.7 percent from a year ago.

For the full year, Target's profits were $1.84bn, or $2.01 a share, up 11.4 percent from $1.65bn, or 55 $1.81 a share, the year before. Revenues rose 9.7 percent to $48.16bn from $43.91bn, driven by new stores, a 2.9 percent rise in same-store sales and growth in credit revenues.

From the Financial Times

3. Exchange information with a partner and complete the chart.

Wal-Mart

Target

Wal-Mart

Target

4th quarter

4th quarter

Full year

Full year

Total profits

% increase in profits/

earnings

Earnings per share

Sales revenues

4. Read both texts and answer the questions. Which company:

1. feels confident about the future?

2. has developed a more fashionable image?

3. had particularly good results overseas in the last 12 months?

4. is not planning to increase prices?

5. did better than the American stock market forecast?

6. feels its success is due to the variety of its goods?

5. Match the words to make word partnerships from the text.

1. consumer a) division

2. tax b) pressure

3. international c) refunds

4. quarterly d) spending

5. price e) earnings