During what Target Chief Executive Gregg Steinhafel called an intensely promotional holiday season, Target's gross margin edged down 0.3 percentage point to 28.4 percent of sales.
Still, Target earned $1.45 per share in the fiscal fourth quarter, topping analysts' average forecast by 5 cents, according to Thomson Reuters I/B/E/S.
Department store chain Kohl's Corp
Kohl's said it would earn $4.75 per share in fiscal 2012, below the $4.95 that Wall Street analysts were projecting. The company's shares were down 3.2 percent in premarket trading.
Kohl's Chief Executive Kevin Mansell told analysts on a conference call that the company did see resistance from our customer to price increases put in place to help deal with higher product costs.
Kohl's forecast gross margin would fall 1.6 percentage points in the current quarter compared with a year ago. It expects same-store sales to rise only 1 percent this quarter.
Target earned $981 million, or $1.45 per share, in the fiscal fourth quarter, compared with $1.04 billion, or $1.45, a year earlier.
Target expects to earn between $4.55 and $4.75 per share this year, excluding the costs of its entry into Canada. Including those costs, the range is 50 cents lower.
It expects first-quarter earnings of 97 cents to $1.07 per share.
Target previously said fourth-quarter sales rose 3.3 percent to $20.94 billion. Sales at stores open at least a year, or same-store sales, rose 2.2 percent, down from a 2.4 percent rise during the year-earlier holiday season.
The average amount spent per transaction at Target's established stores rose 1.8 percent in the quarter as shoppers bought more items and prices were higher.
Target shares were up 24 cents to $53.21 in premarket trading.
(Reporting by Phil Wahba in New York; Additional reporting by Jessica Wohl in Chicago; editing by Dave Zimmerman and John Wallace)