Remember when Target's
Target's second-quarter net income fell 7.6% to $634 million, or $0.82 per share. Sales increased by 5.7% to $15 billion, and same-store sales dropped by 0.4%.
The credit card unit helped drag Target down, despite the fact that the average receivables directly funded by Target in the second quarter fell by 19.8%, reflecting the investment JP Morgan Chase
Meanwhile, Target's own interest expense became more pronounced, increasing by $63 million due to higher debt balances that Target used for capital investment, share repurchases, and the receivables portfolio.
For the most part, I've been pretty bullish on Target stock over the years, preferring its strategy, brand, and potential for growth to discount-rival Wal-Mart
Target has been bucking the trend in a negative way here lately; many low-price retailers have found themselves in their sweet spot in the current climate, with Wal-Mart, Costco
Consumers are more interested in cheap food and other necessities as budgets become increasingly constrained, and Target's previous renown for cheap, chic, discretionary apparel and home furnishings is a bit of an Achilles' heel at the moment.
Then again, some retailers are still racing ahead, despite the poor economy -- consider Urban Outfitters
Target faces near-term challenges, and so, I don't think there's any huge rush to buy in with any sense of urgency. However, given Target's many strengths, I think investors should keep the stock on their watch lists, at the very least; I still think it's compelling for those with long-term horizons.
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JPMorgan Chase is a Motley Fool Income Investor selection. Wal-Mart Stores is a Motley Fool Inside Value pick. Costco Wholesale is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletters today, free for 30 days.
Alyce Lomax owns shares of Urban Outfitters. The Fool has a disclosure policy.