You'd think these would be great days for discounters, and in some ways, they are. However, Target (NYSE:TGT) has failed to stir up customer traffic, so maybe its historical "cheap chic" reputation has struck many shoppers as too chic and not cheap enough.

First-quarter net income at Target fell 13%, to $522 million, or $0.69 per share. Revenue increased a scant 0.2%, to $14.83 billion, while same-store sales decreased by 3.7%.

As has been the case for many retailers recently, investors seem to be happy with the tidings. The quarterly results beat analysts' earnings expectations by a long shot -- $0.10 per share. Target even met expectations on the top line.

The quarter reflects a pretty common trend in retail at the moment -- flagging profitability and a failure to grow traffic and revenue. Of course, given the ugly consumer spending environment, this result can be expected for many retailers.

Things are tough all over. Although this is Target's seventh consecutive quarter of profit decline, Wal-Mart Stores (NYSE:WMT) recorded only flat net income in its most recent quarter, with sales dipping 0.6%, in part due to the strong dollar. Still, Wal-Mart has been gaining market share, as nervous consumers have been attracted to its low-priced products. Another rival, BJ's Wholesale (NYSE:BJ), reported an impressive 41% increase in quarterly earnings. At this time, Target doesn't look terribly alluring by comparison.

Not only has Target had a surprisingly hard time in the current environment, but Bill Ackman of Pershing Square Capital Management has been pressing for changes at the retailer. Ackman has agitated for changes at companies such as Borders Group (NYSE:BGP), Wendy's/Arby's (NYSE:WEN), and McDonald's (NYSE:MCD). Such activism also infuses a bit of uncertainty into the retailer's future. 

I've long been a fan of Target's business, but given these considerations, a wait-and-see approach is probably better on this stock at the moment. Given that the company wasn't growing earnings even before the full-blown recession kicked in, investors would do well to not park their money in front of Target until it can show some earnings traction.

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