Despite some of the pessimism that surrounded Target (NYSE:TGT) after a difficult April (a problem that was experienced by many other retailers, incidentally), it has of course delivered up impressive first-quarter results.

First-quarter net income at Target increased 17.6% to $651 million, or $0.75 per share. Total sales jumped 9.2% to $14.04 billion, with a 4.3% increase in same-store sales for the period. Unlike rival Wal-Mart (NYSE:WMT), there's not much to worry about with Target's inventory, which increased by 5.9% (not too shabby considering it grew less than sales, even considering the tough April).

In other interesting news, Target's cash reserves dipped slightly to $969 million, while its long-term debt increased 18% to $10.15 billion. Free cash flow generation was also negative, given $1.18 billion in capital expenditures compared to $462 million in cash from operations that Target generated in the quarter.

In the conference call, Target Chief Financial Officer Doug Scovanner said the capital expenditures relate to ongoing investment in new stores, distribution and systems infrastructure, and re-investing in some existing stores. The company expects its capital expenditures to increase by $300 million more than previously forecast this year, to a range of $4.5 billion to $4.7 billion.

When further questioned by an analyst about the capex spending, management said most of that is related to new store openings, as well as purchasing of real estate, including the unplanned purchase of the site of a high-profit, high-volume store with a lease set to run out long before the value of the store could be realized.

In case you didn't realize it -- and I didn't --  Target owns the land beneath about 80 percent of its stores. This is interesting. Owning real estate is a strategy employed by another discounter, Costco (NASDAQ:COST), freeing the stores from too much in the way of recurring operating lease expense.  

Investors can celebrate the fact that the company said in the call that it continues to take market share, and expressed optimism that it can continue delivering double-digit increases in earnings per share for 2007 "and many years to come." On the other hand, Target said it will open more stores in the second quarter than it did in the same period last year, which will add up to ramped-up expenses in the quarter, and it pointed out tough comparisons to the second part of last year (although it called the $3.60 per share analysts are expecting "within the range of likely outcomes").   

Ever since the disappointing April comps, Target's stock lost steam, but I found myself thinking that that seemed like short-term angst about this company. I may have thought Target shares looked a wee bit too dear for a purchase last quarter, and it still holds true that some investors may prefer to wait for temporary negative sentiment to jump in. (Given the fact that the company is offering a slight bit of caution on the rest of the year, that isn't unreasonable.)

However, I can understand why investors might see this as a great opportunity. Here we have a retailer that  expects to continue to deliver double-digit earnings growth for the next several years while at the same time continuing to increase its market share. Target may talk about delighting its customers, which it most certainly seems to do, but it seems that over the long term, Target has a good shot at delighting its shareholders as well.

Target some related Foolishness:

Wal-Mart is a Motley Fool Inside Value recommendation. Costco has been picked for Motley Fool Stock Advisor.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy