Retailers Give a Mixed Bag of Quarterly Profit Results

Target Corp.’s fiscal first-quarter profit rose 6.3% as the discount retailer pushed its expansion outside the Midwest and into big markets such as New Jersey and Texas.

Several other retailers reported fiscal first-quarter results Tuesday. Talbots Inc.’s net income jumped 23%, and discounter Kohl’s Corp. reported a 43% rise in profit. Saks Inc.’s earnings fell 45%. Staples Inc.’s earnings were unchanged.

Target, which opened 70 stores in the last year, benefited from an 11% sales gain. Target is the third-largest U.S. discounter after Wal-Mart Stores Inc. and Kmart Corp. Sales declines at Target-owned Mervyn’s and Marshall Field’s department stores tempered profit growth.

Net income at Target rose to $254 million, or 28 cents a share, from $239 million, or 26 cents, a year earlier. Profit matched the average estimate of analysts polled by Thomson Financial.

Sales in the period ended May 5 rose 7.7% to $8.35 billion, the Minneapolis-based company said, and sales at stores open at least a year rose 1.7%.

The company, which has 991 discount stores, plans to add 72 this year in 32 states. Target’s shares on Wednesday rose $1.14 to $38.89 on the New York Stock Exchange. They have gained 21% this year.

Hingham, Mass.-based Talbots’ net income rose to $40.1 million, or 62 cents a share, from $32.7 million, or 52 cents. Sales in the quarter ended May 5 rose 10% to $401.1 million.

The company, which has 748 stores, warned that sales and earnings growth in the second quarter will slow from a year ago.

Talbots shares fell $7.90, or 16%, to $40.90 on the NYSE, their second-biggest percentage decline since the company first sold shares to the public in 1993. The stock had gained 88% in the last year.

At Kohl’s, based in Menomonee Falls, Wis., net income in the quarter ended May 5 rose to $75.1 million, or 22 cents a diluted share, compared with $52.6 million, or 16 cents a diluted share, a year earlier.

Kohl’s reported this month that total sales in the quarter rose a healthy 21.1% while sales at stores open at least a year rose 5.3%. Kohl’s shares were up 17 cents to $67.16 on the NYSE.

Saks, which operates Saks Fifth Avenue stores, said its profit before certain items for the quarter ended May 5 was $17.6 million, or 12 cents a share, compared with a profit of $32.4 million, or 23 cents, a year ago.

Sales for the quarter fell 2.4% to $1.46 billion from $1.5 billion a year ago, while sales at stores open at least a year fell 2%.

Shares of Saks closed down 57 cents at $12.38 on the NYSE.

Staples’ net income was $39.5 million, or 9 cents a share, compared with profit from operations of $39.9 million, or 9 cents, a year earlier. Sales in the quarter ended May 5 rose 4.4% to $2.67 billion.

Profit matched the average estimate of analysts polled by Thomson Financial. Staples forecast second-quarter earnings of 8 cents to 10 cents a share. The average analyst estimate is 10 cents.

Staples, based in Framingham, Mass., has more than 1,300 stores in North America and Europe. The company’s shares rose 79 cents to $16.31 on Nasdaq.