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Second quarter unlucky for Target with 13 percent profit drop

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Target reported a 13 percent drop in second-quarter profits Wednesday. The accounting is for the quarter that ended on Aug. 3.

The Wall Street Journal theorized that an expensive and uneven launch of new stores across Canada, along with shoppers who continue to be cautious with their cash, led to the disappointing report.

The Associated Press reports that the Minneapolis-based company is the latest in a string of retailers, including rival Wal-Mart, that have lowered business expectations as they face an uncertain economy.

"Target's second quarter financial results benefited from disciplined execution of our strategy and strong expense control, offsetting softer-than-expected sales," according to Chairman and Chief Executive Gregg Steinhafel, who was quoted in the Journal.

Target says it earned $611 million, or 95 cents per share. That compares with $704 million, or $1.06 per share, a year earlier. Analysts were expecting earnings of 96 cents per share on revenue of $17.28 billion, according to FactSet.

Target has worked to build its customer base by offering a larger selection of food and giving shoppers a 5 percent discount when they pay with Target-branded credit and debit cards. Next month, Target is set to launch its latest limited-time designer collaboration, this time with Phillip Lim.

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