Discount retailer Target Corp. will curb store expansion and tighten credit-card terms after reporting fiscal-second-quarter net income fell 7.6% because of credit-card write-offs and weak sales.
The Minneapolis store chain said profit from credit-card operations fell sharply for the fiscal quarter ended Aug. 2 as a result of write-offs and the sale earlier this year of a half-interest in its credit-card receivables.
The operation, which had been delivering strong profit, reported income tumbled 65% to $74 million, from $213 million a year earlier. In May, Target sold a half-interest in its card receivables to J.P. Morgan Chase & Co. for $3.6 billion.
The company said it is slowing the growth of its credit-card portfolio and revising credit terms to counter higher bad-debt expense. Credit losses this year will run between 8% and 9% of loans, higher than its spring forecast, and higher than the 5.9% of loans in the last fiscal year.
It said growth in credit-card receivables, which increased at an about 27% rate in the second quarter, will moderate into the teens by the fourth quarter.
Target has successfully managed inventories and labor expense controls to avoid profit-sapping mark downs and expenses, Gregg Steinhafel, chief executive, told investors Tuesday. Retail gross margin, a measure of profitability, rose slightly in most areas, he said.
Net declined to $634 million, or 82 cents a share, from $686 million, or 80 cents a share, in the year-earlier quarter. Per share profit increased as a result of stock repurchases that reduced the number of shares outstanding.
Revenue rose 5.8% to $15.47 billion. Retail sales, excluding credit-card revenue, rose 5.6% to $14.97 billion, from $14.17 billion boosted by new store openings. Sales at stores open at least a year, a measure of retail-market share, declined 0.4% in the quarter.
source :http://www.google.com/news?
Friday, August 22, 2008
Wednesday, August 20, 2008
Target to Slow Expansion as Net Falls
Discount retailer Target Corp. will curb store expansion and tighten credit-card terms after reporting fiscal-second-quarter net income fell 7.6% because of credit-card write-offs and weak sales.
The Minneapolis store chain said profit from credit-card operations fell sharply for the fiscal quarter ended Aug. 2 as a result of write-offs and the sale earlier this year of a half-interest in its credit-card receivables.
The operation, which had been delivering strong profit, reported income tumbled 65% to $74 million, from $213 million a year earlier. In May, Target sold a half-interest in its card receivables to J.P. Morgan Chase & Co. for $3.6 billion.
The company said it is slowing the growth of its credit-card portfolio and revising credit terms to counter higher bad-debt expense. Credit losses this year will run between 8% and 9% of loans, higher than its spring forecast, and higher than the 5.9% of loans in the last fiscal year.
It said growth in credit-card receivables, which increased at an about 27% rate in the second quarter, will moderate into the teens by the fourth quarter.
Target has successfully managed inventories and labor expense controls to avoid profit-sapping mark downs and expenses, Gregg Steinhafel, chief executive, told investors Tuesday. Retail gross margin, a measure of profitability, rose slightly in most areas, he said.
Net declined to $634 million, or 82 cents a share, from $686 million, or 80 cents a share, in the year-earlier quarter. Per share profit increased as a result of stock repurchases that reduced the number of shares outstanding.
Revenue rose 5.8% to $15.47 billion. Retail sales, excluding credit-card revenue, rose 5.6% to $14.97 billion, from $14.17 billion boosted by new store openings. Sales at stores open at least a year, a measure of retail-market share, declined 0.4% in the quarter.
Target, which gets about 40% of sales from clothing and home decor, has been harder hit in the downturn than discount rival Wal-Mart Stores Inc., which gets about 40% of its sales from consumables, such as groceries. Wal-Mart has reported strong same-store sales gains all year.
Doug Scovanner, chief financial officer, said Target will trim about 20 stores from its new store openings next year. Target had previously said it planned to open between 90 and 100 stores this year and next.
Economic conditions continue to be volatile. The total use of credit cards for store purchases, which had been rising, was flat in the fiscal first quarter and down in the second quarter, he said. "The use of credit cards is determining our same-store sales," Mr. Scovanner said.
Source : www.new.google.com
The Minneapolis store chain said profit from credit-card operations fell sharply for the fiscal quarter ended Aug. 2 as a result of write-offs and the sale earlier this year of a half-interest in its credit-card receivables.
The operation, which had been delivering strong profit, reported income tumbled 65% to $74 million, from $213 million a year earlier. In May, Target sold a half-interest in its card receivables to J.P. Morgan Chase & Co. for $3.6 billion.
The company said it is slowing the growth of its credit-card portfolio and revising credit terms to counter higher bad-debt expense. Credit losses this year will run between 8% and 9% of loans, higher than its spring forecast, and higher than the 5.9% of loans in the last fiscal year.
It said growth in credit-card receivables, which increased at an about 27% rate in the second quarter, will moderate into the teens by the fourth quarter.
Target has successfully managed inventories and labor expense controls to avoid profit-sapping mark downs and expenses, Gregg Steinhafel, chief executive, told investors Tuesday. Retail gross margin, a measure of profitability, rose slightly in most areas, he said.
Net declined to $634 million, or 82 cents a share, from $686 million, or 80 cents a share, in the year-earlier quarter. Per share profit increased as a result of stock repurchases that reduced the number of shares outstanding.
Revenue rose 5.8% to $15.47 billion. Retail sales, excluding credit-card revenue, rose 5.6% to $14.97 billion, from $14.17 billion boosted by new store openings. Sales at stores open at least a year, a measure of retail-market share, declined 0.4% in the quarter.
Target, which gets about 40% of sales from clothing and home decor, has been harder hit in the downturn than discount rival Wal-Mart Stores Inc., which gets about 40% of its sales from consumables, such as groceries. Wal-Mart has reported strong same-store sales gains all year.
Doug Scovanner, chief financial officer, said Target will trim about 20 stores from its new store openings next year. Target had previously said it planned to open between 90 and 100 stores this year and next.
Economic conditions continue to be volatile. The total use of credit cards for store purchases, which had been rising, was flat in the fiscal first quarter and down in the second quarter, he said. "The use of credit cards is determining our same-store sales," Mr. Scovanner said.
Source : www.new.google.com
Tuesday, August 19, 2008
Many Low-To-Moderate Income Americans Still Not 'Banked' Despite Numerous Financial Options Available
MIAMI and BOSTON, Aug 18, 2008 /PRNewswire via COMTEX/ ----A new study shows that nearly one-third of low-to-moderate income (LMI: 40.00, -1.31, -3.17%) Americans are either unbanked (holding no basic bank account) or underbanked (having a basic bank account and yet relying on less sophisticated methods for everyday transactions such as check-cashing). This problem is particularly acute for LMI Hispanics, 53% percent of whom are either unbanked or underbanked. Only 23% of non-Hispanics fall into this category.
The latest Americanos Poll(R: 68.05, -2.58, -3.65%), a collaboration between market research firm Encuesta, Inc. and microlender ACCION USA, sheds light on the financial attitudes and behaviors of U.S. low-to-moderate income individuals, with special focus on the habits of U.S.-born and foreign-born Hispanics. Survey results are available upon request.
The survey finds that while LMI Americans say they are managing their personal debt, many struggle to use credit wisely. Many acquire personal debt for everyday living expenses such as for bills (15%) or food or housing (11%). Fifteen percent turn to credit cards for cash advances. Only 45% are "very" familiar with how to build or manage their credit. Here too, Hispanics are most in need of guidance: only 36% are "very" familiar with how to build or manage credit, compared to 46% of non-Hispanics.
Other key findings from the Americanos Poll:
-- Many low-to-moderate income Americans are not taking steps to secure their financial future. Forty-three percent do not consistently save; 21% claim there simply is not enough money left after paying for living expenses and bills and 22% report they spend more than what they save. Furthermore, while LMI individuals express interest in investments, home ownership is the only asset class in which significant numbers (42%) are invested.
-- Familiarity with various financial products and services among low-to-moderate income individuals is limited. Fewer than half profess awareness of educational savings accounts (32%), credit/debt counseling services (39%), or even common loan products such as equity credit lines (43%).
-- LMI Hispanics rate their awareness of many financial products 10 to 30 points lower than do LMI non-Hispanics. For example, 68% of non-Hispanics rate themselves "very" or "somewhat" familiar with home loans and mortgages, vs. 43% of Hispanics. For other select products, the non-Hispanic vs. Hispanic breakdown is as follows: checking accounts, 95% - 76%; regular savings accounts, 90% - 68%; retirement savings accounts, 68% - 38%; small business loans, 33% - 19%.
-- For many LMI Americans, check cashing and bill payment habits constitute a major hurdle to the use of more sophisticated banking services. Overall, 39% use cash for paying bills and 30% pay via money order. LMI Hispanics in particular favor cash for this purpose (65% vs. 34% of non-Hispanics). Hispanics are also more likely than non-Hispanics to manage their income on a cash basis, with nearly three in 10 (28%) cashing checks at the issuing bank, using check-cashing outlets or being paid in cash, compared to 12% of non-Hispanics.
source : http://www.google.com/news?
The latest Americanos Poll(R: 68.05, -2.58, -3.65%), a collaboration between market research firm Encuesta, Inc. and microlender ACCION USA, sheds light on the financial attitudes and behaviors of U.S. low-to-moderate income individuals, with special focus on the habits of U.S.-born and foreign-born Hispanics. Survey results are available upon request.
The survey finds that while LMI Americans say they are managing their personal debt, many struggle to use credit wisely. Many acquire personal debt for everyday living expenses such as for bills (15%) or food or housing (11%). Fifteen percent turn to credit cards for cash advances. Only 45% are "very" familiar with how to build or manage their credit. Here too, Hispanics are most in need of guidance: only 36% are "very" familiar with how to build or manage credit, compared to 46% of non-Hispanics.
Other key findings from the Americanos Poll:
-- Many low-to-moderate income Americans are not taking steps to secure their financial future. Forty-three percent do not consistently save; 21% claim there simply is not enough money left after paying for living expenses and bills and 22% report they spend more than what they save. Furthermore, while LMI individuals express interest in investments, home ownership is the only asset class in which significant numbers (42%) are invested.
-- Familiarity with various financial products and services among low-to-moderate income individuals is limited. Fewer than half profess awareness of educational savings accounts (32%), credit/debt counseling services (39%), or even common loan products such as equity credit lines (43%).
-- LMI Hispanics rate their awareness of many financial products 10 to 30 points lower than do LMI non-Hispanics. For example, 68% of non-Hispanics rate themselves "very" or "somewhat" familiar with home loans and mortgages, vs. 43% of Hispanics. For other select products, the non-Hispanic vs. Hispanic breakdown is as follows: checking accounts, 95% - 76%; regular savings accounts, 90% - 68%; retirement savings accounts, 68% - 38%; small business loans, 33% - 19%.
-- For many LMI Americans, check cashing and bill payment habits constitute a major hurdle to the use of more sophisticated banking services. Overall, 39% use cash for paying bills and 30% pay via money order. LMI Hispanics in particular favor cash for this purpose (65% vs. 34% of non-Hispanics). Hispanics are also more likely than non-Hispanics to manage their income on a cash basis, with nearly three in 10 (28%) cashing checks at the issuing bank, using check-cashing outlets or being paid in cash, compared to 12% of non-Hispanics.
source : http://www.google.com/news?
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