Target profit falls almost 24 percent

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NEW YORK (Reuters) - Target Corp reported its fifth consecutive drop in quarterly profit on Monday, on dwindling demand for its trendy merchandise from shoppers who face tighter budgets and are struggling to make payments on the discount retailer's credit cards.

The company also temporarily suspended nearly all of its share buybacks and cut capital spending to help protect its debt ratings.

Profit fell almost 24 percent to $369 million, or 49 cents per share, in the third quarter ended Nov 1, from $483 million, or 56 cents per share, a year ago.

Analysts, on average, expected TARGET (TGT.NY)to report earnings of 48 cents per share, according to Reuters Estimates.

Sales rose 1.7 percent to $14.6 billion. Sales at stores open at least a year, or same-store sales, fell 3.3 percent.

While Target has made a name for itself selling cheap but trendy designer clothes and home decor, its business has faltered in the past year as shoppers shift spending in favor of basics, like food and toiletries.

Its profits are also taking a hit as more customers fall behind on payments of their Target credit cards.

In contrast, rival Wal-Mart Stores Inc posted a nearly 10 percent rise in quarterly profit last week as shoppers sought its low prices on food and toiletries. Analysts say shoppers perceive Target's prices to be higher than those at Wal-Mart.

With its stock price down roughly 38 percent in the past year, Target is facing pressure from investor William Ackman, who has proposed the retailer spin off a separate company that would own the land on which its stores are built.

(Reporting by Nicole Maestri; Editing by Derek Caney)

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