Target Corp. said Tuesday that profits from its credit card business dropped 65% from a year earlier, to $74 million, in its fiscal second quarter, which ended Aug. 2.
The Minneapolis retailer attributed the decline in part to its sale of a 47% stake in the portfolio to JPMorgan Chase & Co. in May. However, Target's bad debt expenses more than doubled in the period, to $256 million.
Writeoffs as a share of average receivables rose 3.3 percentage points, to 8.7%, and Target added to reserves for future periods. Lower interest rates also helped reduce the yield on the portfolio, Target said.