MINNEAPOLIS — Target Corp. here said Wednesday that strong apparel sales and a better mix of higher-margin product helped boost profit margins in the first quarter.
As previously reported, Target posted a 5.3% gain in comparable-store sales in the three-month period, which ended April 28. On Wednesday the company said its net income for the quarter was up about 1.2%, to $697 million. EBITDA in the retail segment was $1.7 billion, up 8.5% over year-ago results. Retail sales for the first quarter were up 6.1%, to $16.5 billion.
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In a conference call with analysts on Wednesday, Kathryn A. Tesija, executive vice president of merchandising, said a range of factors contributed to the improved profit margins, including private-label growth, price optimization, customers trading up to higher-margin brands, and inventory controls.
The improved margins came despite an increased mix of lower-margin consumables. The company now has more than 1,100 discount stores remodeled with a broader assortment of grocery products under the PFresh initiative.
Target increased its profit outlook for the year by 5 cents per share, to a range of $4.60 to $4.80.
