* Target raises quarterly payout by $0.05 to $0.30/share
* CEO repeatedly asked about donation to MN Forward
* Shares down 0.4 pct, hit lowest level since Dec. 2009
(Adds details on meeting, byline; updates stock activity)
By Jessica Wohl
CHICAGO, June 8 Target Corp (TGT.N) announced a
20 percent increase in its quarterly dividend on Wednesday, but
its shares hit an 18-month low on concerns that the retailer is
not seeing enough shoppers buy the discretionary items that are
a cornerstone of its strategy.
Target's growth in recent years came from selling a wide
variety of higher-margin apparel and decorative home goods
along with basics such as detergent. Lately, consumers -- or
"guests" in Target's parlance -- have focused on buying the
basic goods they need and little else.
Guests are focused on the "value end" of the price
spectrum, Chairman, President and Chief Executive Gregg
Steinhafel told shareholders at the company's annual meeting,
held at its first store within Pittsburgh's city limits. The
meeting was webcast.
Following his prepared remarks, discussion of Target's
retail strategy essentially ground to a halt.
Instead, Steinhafel was peppered with questions about a
$150,000 donation Target made in 2010 to MN Forward, a group
that supported gubernatorial candidate Tom Emmer. Emmer, who
lost the race to Gov. Mark Dayton, supported a proposed
amendment to Minnesota constitution to ban gay marriage.
Several shareholders and shoppers were disappointed after
Target donated money to the group. Musician Lady Gaga, who
supports gay rights, walked away from plans to sell a special
album at Target in early 2011.
Bill de Blasio, New York City public advocate and trustee
of the New York City employees retirement system, which holds
about $50 million in Target shares, said on Tuesday that he is
"deeply concerned" when he sees those pension investments used
A number of shareholders at Wednesday's meeting echoed his
comments, repeatedly asking Steinhafel about the donation.
Target has changed its review process for donations since the
MN Forward donation, but some shareholders would like to see a
more explicit apology and broader change from the company.
"Last year was a great learning experience for us,"
Steinhafel said as he repeatedly suggested moving onto a
"Does anybody have a question relating to our business that
is unrelated to political giving? I would love to hear any
question related to something else," Steinhafel said.
Analysts have expressed concerns that the company is losing
some of its cachet -- and profit margins -- as the economic
malaise being felt by shoppers eats away at spending on
clothing and other goods.
In May, sales at Target stores open at least a year rose
2.8 percent, at the low end of the company's expectations of a
low-to-mid single-digit percentage increase. Fewer shoppers
came in during the second half of the month, it said.
"Shareholders missed a golden opportunity to pepper
management on why the stock is at the levels that it is," said
Wall Street Strategies analyst Brian Sozzi.
Target shares plunged 21.7 percent from the beginning of
2011 through Tuesday. Shares of Wal-Mart Stores Inc (WMT.N)
fell just 10 cents, or 0.2 percent, over the same period, even
though the company has not posted an increase in same-store
sales at U.S. Walmart stores in two years.
Target's board declared a quarterly dividend of 30 cents
per share, payable on Sept. 10 to shareholders of record as of
Aug. 18. Target had paid a dividend of 25 cents per share
during the previous four quarters.
The shares of Minneapolis-based Target were down 0.4
percent at $46.85 in afternoon trading after falling as low as
$46.53, its nadir since December 2009, earlier in the session.
(Reporting by Jessica Wohl; editing by Andre Grenon and
Gerald E, McCormick)