Retailer Target Sees Drop In Profits

August 19, 2008 2:07 p.m. EST

New York, NY (AHN) - Target Corp. saw a 7.6 percent drop in second quarter profits, the company reported Tuesday, noting its customers focused on necessities such as milk and paper towels.

The Minneapolis-based retailer said it made $634 million. or 82 cents a share, for the three-month quarter that ended Aug. 2. That's down from ^686 million, or 81 cents a share for the same quarter a year ago.

Target acknowledged that back-to-school sales are not strong and that new stores would be opened at a slower pace in fiscal 2009 with an uncertain future for the slumping economy.

Though sales grew by 5.7 percent to $15 billion from $14.2 billion, same-store sales, or sales at stores opened at least a year, fell 0.4 percent. A retailer's health is weighed by same-store sales.