Target sees profits jump on credit card spending

US discount retailer Target yesterday reported a forecast beating rise in third quarter profits.

The company saw a 3.7 per cent increase in third-quarter profits, helped by solid spending and improvement in credit card spending at its stores.

The company said that it earned $555m (£351.9m) or 82 cents per share, in the three-months to 29 October.

Target had forecast earnings of 70 cents to 75 cents per share, and analysts on average were expecting 74 cents.

The Minneapolis-based company has 1,767 US stores and plans to open some in Canada starting in 2013. Excluding costs related to the plan to open stores in Canada, Target said it earned 87 cents per share.

Target REDcards – credit cards and debit cards issued by the retailer –  were used for 9.5 per cent of sales at Target stores during the quarter, up from 5.5 per cent a year ago.

The five per cent discount for purchases made with Target cards began on 17 October 2010, so its impact was not felt during much of last year’s third quarter. The company said customer numbers were on the rise.