Jason Berkes: Target Sees Benefits From DC Openings

Jason Berkes

As Target Corp. begins opening its own food distribution facilities, it expects profit margins to expand, even though expenses will rise, the company said during a conference call with analysts to discuss financial results for the second quarter, which ended Aug. 2. “The combination is a very solid economic proposition for us," Gregg Steinhafel, president and chief executive officer, said. Target opened its first semi-automated food distribution center earlier this month in Lake City, Fla., with a second facility due to open in 2009 in Cedar Falls, Iowa. Net income for the quarter fell 7.6% to $634 million, while sales rose 5.7% to $15 billion. Comparable-store sales dropped 0.4%. For the half, net income fell 7.5% to $1.2 billion, and sales climbed 5.3% to $29.3 billion, while comps fell 0.6%. Steinhafel said growth in food and consumables continued to outpace other categories.

Jason Berkes