First-quarter net income dropped 7.5% to $602 million, or $0.74 per share. Revenue increased 5% to $14.3 billion, but same-store sales fell 0.7%. Gross margin declined from last year this time, too; the company cited faster sales of lower-margin products.
In addition, Target said it completed its deal to sell 47% of its credit card receivables to JPMorgan Chase
I've been surprised Target hasn't been able to capitalize on the current difficulties as well as some of its discount rivals. For example, Wal-Mart
Will these tough times pass? Yes, I think they will. Target is a quality retailer with a great brand; let's not underestimate the fact that it pioneered the "cheap chic" idea. Somehow, I highly doubt Target's current rough patch will last forever. This isn't the type of brand-tarnished retailer I'd give up on, like Sears Holdings
If Target seems to be overshadowed by rivals, I'd say that it's yielding a bargain price for the stock. It's trading at 16 times earnings, a lower price-to-earnings ratio than every other discount retailer named in this article, except for Sears Holdings. Meanwhile, Target's PEG ratio of 1.08 implies it's at undervalued levels, too.
It seems to me some bargain-hunting investors may want to start setting their sights on Target.