MINNEAPOLIS – Discount retailer Target Corp. said first-quarter profits rose 12 percent, but the results narrowly missed Wall Street estimates and its shares fell 4 percent. Investors were spooked as profit margins shrank and selling and administrative expenses rose faster than sales. Target, the nation’s second-largest discounter behind Wal-Mart Stores Inc., said it earned $554 million, or 63 cents per share, for the quarter ended April 29, up from $494 million, or 55 cents per share, during the same period last year. The latest results were a penny a share below the estimate of analysts polled by Thomson Financial. First-quarter revenue rose 12.1 percent, to $12.86 billion from $11.5 billion a year ago. AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREBasketball roundup: Sierra Canyon, Birmingham set to face off in tournament quarterfinalsBut selling, general and administrative expenses grew 15.3 percent, to almost $2.9 billion. That can make investors nervous because it suggests that a company might be spending more on advertising and salaries to attract the same sales dollars. Chief Financial Officer Doug Scovanner said the extra expense was because Target opened three distribution centers during the quarter and remodeled more stores than usual. And he said Target’s gross margin for the full year is likely to be as good as last year’s 31.9 percent of sales, or better. He maintained Target’s guidance for the year, saying analyst estimates that it would earn 69 cents per share for the second quarter and $3.11 for the full year “appear reasonable, given our current outlook.” “On balance, our first-quarter performance gives me even greater confidence than 90 days ago in our ability to generate a mid-teen percentage increase in 2006 earnings per share,” he said. Analysts polled by Thomson Financial were expecting earnings per share for the year of $3.12. Target shares fell $2.19, or 4 percent, to close at $50.02 on the New York Stock Exchange – up from $48.10 earlier in the day, which was at the bottom of its range over the past year. It wasn’t exactly a terrible quarter. Target said profits grew on the strength of store revenue and contributions from its credit card business, which added $162 million to earnings before taxes, which was an increase of $60 million, or almost 60 percent, from the same period last year. Target said its credit card profits grew because of higher interest income and the short-term benefit of expenses for bad debts because many people rushed to file for bankruptcy before the rules changed last fall.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!