Target Corp. Q1 Income Down, But Card Revenue Rises 20%

Target Corp. had net income of $602 million for its fiscal first quarter ended May 3, down 7.5% from $651 million in the same three months last year, the retailer and card issuer reported late Monday. Credit card revenues totaled $500 million, up 19.6% from $418 million in the same period last year. Credit card expenses totaled $274 million, increasing 61.2% from $170 million. Net write-offs for Target's credit card business were $161 million, up 62.6% from $99 million. Net write-offs as a percentage of average receivables grew to 7.6% from 6% a year ago. "As expected, net write-offs in the first quarter increased substantially," Target said in its 10-Q filing with the U.S. Securities and Exchange Commission. "This year-over-year change is due to two primary factors: the unsustainably strong performance in this metric in last year's first quarter and the increased write-off activity concentrated in four states that have been particularly affected by housing-related weakness: Florida, Arizona, Nevada and California."