If Target looks bad compared with Wal-Mart, which posted higher first-quarter earnings and sales last week, it looks good compared with other broadline apparel retailers.
"Target's faring better than most — certainly better than any of the department stores or midpriced mass-tier stores," said Todd Slater, equity analyst at Lazard Capital Markets. "Target is faring remarkably well in a consumer-led recession in the discretionary space."
Slater said the biggest drag on consumer spending was higher oil prices. Crude oil topped $128 a barrel Tuesday.
Target also said it completed the sale of about half of its credit card receivables to J.P. Morgan Chase for $3.6 billion Monday.
That sale lessens the discounter's exposure to the volatile world of consumer lending, but also partially cuts it off from a potential profit center.
At Target's 1,613 stores, earnings before interest and taxes dipped 2.2 percent to $959 million on a 5 percent rise in sales to $14.3 billion. Comparable-store sales slid 0.7 percent.
In the credit card business, profits before interest and taxes dropped 9.6 percent to $199 million, even as revenues shot up 19.8 percent to $500 million. Bad debt expense jumped 108.8 percent to $181 million, as consumers struggled to keep up with their credit card payments.