Target Corporation (TGT) reported fourth quarter results with earnings of $1.24 per share. Earnings were well above the Zacks Consensus Estimate of 77 cents and were up a robust 53.3% year-over-year. Profits were driven by better-than-expected holiday sales.

Total revenue for the quarter increased 3.2% to $20.1 billion, primarily driven by Retail segment sales. Retail sales grew 3.7% year-over-year to $19.7 billion However, revenue from the Credit Card segment fell 14.0% to $462 million.

Comparable-store sales for the quarter grew 0.6%, an improvement over a decline of 1.6% posted in the prior-year quarter. The number of transactions rose to 2.0%, but the average transaction amount dropped 1.3% in the quarter.

Overall gross margin for the quarter expanded 139 basis points (bps) to 30.7% versus 29.3% in the comparable prior-year quarter. The operating margin grew 212 bps to 8.0% from 5.9% in the year-ago period.

The company ended the year with cash and cash equivalents of $2.2 million, total long-term debt of 15,565 million.

Under the company’s share repurchase program, in January 2010, the company repurchased approximately 8.3 million shares of its common stock worth $423 million, at an average price of $50.7.

Based on the performance of the company in the fourth quarter, management provided an outlook for fiscal 2010. In 2010, Target expects that the implementation of its new merchandise initiatives and a continued modest recovery in the economy will benefit its sales.

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