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Target Corp. Second Quarter Earnings Rise 5 Percent

Target Corp. on Tuesday reported earnings per share for the second quarter ended August 4, 2001 of 30 cents, compared with 28 cents in the second quarter ended July 29, 2000. All earnings per share figures refer to diluted earnings per share. Second quarter net earnings were $271 million, compared with $258 million in 2000.

"We are pleased with our second quarter results," said Bob Ulrich, chairman and CEO of Target Corporation. "We remain comfortable that we are well-positioned to deliver reasonable growth in earnings per share throughout the remainder of 2001. Over the long term, we remain confident in our ability to achieve average annual earnings per share growth of 15 percent or more."

Total revenues in the second quarter increased 8.5 percent to $8.952 billion from $8.251 billion in 2000, driven by an 11.8 percent revenue increase at Target Stores. Comparable-store sales for the corporation increased 2.0 percent in the second quarter 2001.

In the second quarter, gross margin rate decreased from the prior year, reflecting both a modest decline in gross margin rate at Target and the mix impact of growth at Target, our lowest gross margin rate division. Operating expense rate was favorable to second quarter 2000, benefiting from modest improvement in Target's operating expense rate and overall growth at Target, our lowest expense rate division. This improvement was partially offset by operating expense rate deterioration in our other segments, principally due to lack of sales leverage.

Pre-tax segment profit increased 5.1 percent to $598 million, compared with $568 million in second-quarter 2000, as pre-tax profit increased 9.2 percent at Target and 9.5 percent at Mervyn's. Marshall Field's pre-tax profit declined 56.4 percent. (Pre-tax segment profit is earnings before LIFO, securitization effects, interest, other expense and unusual items.)
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