February 28 should have been a good day for Target Corp. The trendy discounter released its annual earnings for the fiscal year ended Feb. 2, and its profit-growth figure far exceeded that of rival Wal-Mart Stores, for the first time since 1997. But Target's stock fell nearly 5%. What rattled investors? One reason may be Target's growing reliance on credit-card income. Seeking the flush profits credit can provide, Target is expanding its credit-card business at a faster pace than any other big retailer. The worry, though, is that Target could be left with bad debts should it misjudge the creditworthiness of customers. "It's a much more volatile business [than selling merchandise]," warns UBS Warburg analyst Linda Kristiansen.
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