News

Target boosts 2Q earnings, credits smart cards

August 17, 2003

MINNEAPOLIS -- Target Corp. executives gave credit to the success of the Visa smart cards in reporting second-quarter net earnings of $358 million, up 4 percent compared with $344 million in the same period last year.

Gerald Storch, vice chairman of the retailer, said that all of Target's 1,191 stores had kiosks and point-of-sale terminals equipped to handle the smart card rewards program that began as a pilot in July 2003, according to a report in CardLine. See related stories, "Target to roll out loyalty program in Q3," "Target rolls out customer-reward coupons."

Combined receivables for Target's private-label cards and Visa card were $5.75 billion, up 24 percent from $4.63 billion in 2002's second quarter. The Visa card had receivables of $3.9 billion, up 56 percent compared with $2.5 billion a year ago. Second-quarter Visa card revenues were $211 million, up 55 percent compared with $136 million a year ago.

"The Target Visa card is the primary vehicle propelling this growth," Storch told analysts during a conference call. A gift-card program for college students that parents can reload from a remote location will be launched this fall, he said.

Target Corp., which operates Marshall Field & Co. and Mervyn's stores in addition to Target stores, reported revenues of $10.9 billion, up 9 percent from $10 billion a year ago.