Minneapolis Target Corp. said Monday that a difficult retail environment and weak results from its credit-card segment led to a 24% decline in third-quarter earnings.
Profit for the three months ended Nov. 1 fell to $369 million from $483 million last year.
Sales grew 1.7% in the third quarter of 2008 to $14.6 billion from $14.3 billion in 2007. Sales were helped by new-store expansion, but that was offset by same-store sales, which fell 3.3% during the quarter.
Target chief executive Gregg Steinhafel said in a statement that the results "reflect the significant macroeconomic challenges facing our retail and credit-card segments."
Profit in Target’s credit-card business fell 83% to $35 million from $202 million last year, because of the chain’s lower investment in the portfolio, a decline in the portfolio's overall performance because of higher bad-debt expenses and lower interest rates. Target sold 47% of its credit-card receivables to JPMorgan Chase in May.
The company also said it has temporarily suspended share-buyback programs and will limit capital spending.
"The current environment and our financial outlook have naturally reduced our appetite for investment in our business," said Doug Scovanner, executive VP and CFO, in a statement.
Scovanner added that the company has reduced planned capital expenditures for next year by $1 billion.
"Overall, we believe these related decisions will help to protect our liquidity and strong debt ratings as we continue to operate in a very challenging retail and credit environment," Scovanner said.