Target profit falls 24%; cuts $1B in expenses

Target tgt says a weak retail environment and lower sales at established stores caused third-quarter profit to fall 24%.

To counter the tough environment, Target said it is suspending its share buyback program and cutting capital spending, to save about $1 billion in 2009.

The discount retailer says profit for the three months ended Nov. 1 fell to $369 million, or 49 cents a share, from $483 million, or 56 cents a share, last year.

Revenue rose 2% to $15.11 billion.

Analysts polled by Thomson Reuters predicted a profit of 48 cents per share on revenue of $15.24 billion.

Chief Executive Gregg Steinhafel says results "reflect the significant macroeconomic challenges facing our retail and credit-card segments."

Sales were helped by new-store expansion, but that was offset by sales in stores open at least a year, which fell 3.3% during the quarter.

"On an ongoing basis we evaluate our deployment of capital resources, both for investment in our business and execution of our share repurchase program," said Doug Scovanner, executive vice president and chief financial officer. "The current environment and our financial outlook have naturally reduced our appetite for investment in our business, and we have also temporarily suspended substantially all of our share repurchase activity. At this time, we have reduced our expected 2009 capital expenditures by about $1 billion.

" Overall, we believe these related decisions will help to protect our liquidity and strong debt ratings as we continue to operate in a very challenging retail and credit environment."