The income total reflected $203 million, or $0.23 per share,realized from the early September sale of Mervyn's 257 stores andfour distribution centers to an investment group comprised of SunCapital Inc., Cerberus Capital Management, and Lubert-Adler/Klaffand Partners, and all of Mervyn's credit card receivables to GEConsumer Finance. Without the Mervyn's sale, earnings would havebeen $0.37 per share, a penny short of some analysts'expectations.

Still, Target executives characterized the third quarter as agood one. "Sales of our back-to-school and back-to-collegeofferings were in line with our expectations, and growth in bothtraffic and transaction amounts contributed equally to our sales inthe third quarter," noted Gregg Steinhafel, president of Target,during Thursday's 3Q earnings conference call.

Target opened 46 new stores in the quarter, including 10 newsuperstores, to bring the retail giant's total number of stores to1,313 in 47 states, of which 136 are SuperTargets. An emphasis atSuperTargets is food sales, the better to compete with othermegastores. "We want to offer a complete assortment of consumablesand commodities priced at parity with Wal-Mart," saidSteinhafel.