Target Corp on Tuesday said its quarterly profit rose more than 12 percent, boosted by strong sales at stores open at least a year and returns from its credit-card business.

The retailer also reiterated its full-year earnings outlook.

Target, the second-largest U.S. discount chain behind Wal-Mart Stores Inc, said earnings rose to $686 million, or 80 cents per share, in its second quarter ended August 4 from $609 million, or 70 cents per share, a year earlier.

Analysts, on average, had been expecting it to earn 80 cents per share, according to Reuters Estimates.

Retail stocks have been pressured in recent weeks as investors fret that the deteriorating housing market, rising U.S. mortgage defaults and higher gas and food prices are curbing consumer spending.

Wal-Mart reported a lower-than-expected quarterly profit and cut its full-year earnings forecast last week, saying economic pressures like higher fuel prices have depleted shoppers' wallets.

But Target's sales at existing stores continue to outpace those at Wal-Mart. Its sales of cheap but trendy clothing and home decor have helped to offset sales of lower-margin goods like groceries. Wal-Mart is struggling in both its clothing and home businesses.

Target is showing very strong execution, said Craig Johnson, president of retail consulting firm Customer Growth Partners, adding that Target tends to cater to higher-income shoppers who are better able to weather economic bumps than those at Wal-Mart.

Target said total quarterly revenue rose to $14.62 billion from $13.35 billion a year ago, while comparable-store sales -- a key retail gauge that measures sales at stores open longer than one year -- increased 4.9 percent.

Credit-card revenue rose to $453 million from $388 million a year ago. Target offers a Target Visa and another card that can be used only at its stores.

Bob Ulrich, Target chairman and chief executive officer, in a statement said the company still believes that $3.60 remains within the range of likely outcomes for our full-year 2007 earnings per share. The company made a similar comment when it reported first-quarter results.

Analysts, on average, are expecting full-year earnings per share of $3.62, according to Reuters Estimates.

Target on Monday reaffirmed its August comparable-store sales forecast of 4 percent to 6 percent growth. Target gave its sales estimate earlier this month, and is schedule to report final August sales on September 6.

Through Monday, Target's shares have risen almost 4 percent this year, while Wal-Mart shares are down close to 6 percent and the S&P Retail Index is down 7 percent.

Shares of Target were up 3 cents at $59.12 in morning trading on the New York Stock Exchange.

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