August 18, 2011 / 4:34 PM / 7 years ago

UPDATE 1-Target optimistic on REDcard holders, Canada

* Sees sales of $100 bln or more, EPS of $8 in six years

* REDcard holders to make up larger chunk of overall sales

By Jessica Wohl

CHICAGO, Aug 18 (Reuters) - Target Corp’s (TGT.N) customers like its REDcard credit and debit cards, with the top 25 percent of shoppers who used the cards spending $3,000 a year or more, it said on Thursday.

Target, which has had its own credit cards for years, last year introduced a nationwide 5 percent discount for shoppers using its cards as it works on increasing shopper loyalty and getting them to buy more when they visit.

More than 9 percent of sales now come from REDcard holders, and that should rise to more than 12 percent next year, Chief Financial Officer Douglas Scovanner said during a New York meeting with Wall Street analysts that was also webcast.

The Minneapolis-based discount retailer, known for selling a mix of household basics and chic apparel and accessories, has no plans to enter another country besides opening shops in Canada, said Chief Executive Gregg Steinhafel. More than 30,000 Canadians already have REDcards even though Target has yet to open any stores there, the company said.

The company expects annual sales of $100 billion or more and earnings of at least $8 per share in six years, once initiatives such as opening its first Canadian stores in 2013, selling fresh food at additional U.S. stores and testing new smaller City Target stores in major markets such as Chicago next year take hold. Last year, Target had $65.79 billion in sales and earnings of $4 per share.

On Wednesday, Target reported a bigger-than-expected rise in quarterly profit and forecast a more profitable year than analysts were anticipating. [ID:nN1E77G04Y] (Editing by Robert MacMillan)

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