ADVERTISEMENT

Target profits plunge following credit card losses

By Seamus McAfee

Target Corp. reported a 41 percent decrease in fourth-quarter profit, ending January 2009, attributing the loss to a drop-off in retail sales and an increase in credit card delinquency.

Target, along with many other retailers, has struggled as consumers cut back on spending habits in the face of a sluggish economy. Target's company-owned credit card segment in particular has struggled significantly, with tripling bad-debt expenses and rising delinquency rates.

"Our financial results for both the fourth quarter and 2008 fiscal year reflect the impact of unprecedented economic conditions on both of our business segments," said Gregg Steinhafel, chairman, president and chief executive officer, in a company press release.

Target's credit card segment profit declined 80.5 percent to $155 million in 2008 from $797 million in 2007. Chief Financial Officer Douglas Scovanner said in press conference with analysts that he thought it was "highly likely" that Target's credit cards would return to profit levels within the next two quarters.

The retailer has announced measures to try and cut costs, including cutting 1,000 positions at its headquarters office, closing an Arkansas distribution center, and canceling planned store openings.

 

Published: February 25, 2009


Join the discussion
We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.




Follow Us


Updated: 12-02-2016


Weekly newsletter
Get the latest news, advice, articles and tips delivered to your inbox. It's FREE.


ADVERTISEMENT