Softer than expected sales have pushed discount retailer Target Corporation to a 7.5% drop in first quarter profit as cash-strapped consumers tightened their belts.

For the three months to 3 May, net earnings fell to $602m or $0.74 per share, from $651m or $0.75 per share in the same period a year ago.

Retail sales rose 5.0% to $14.3bn from $13.6bn, but this growth was due to the addition of new stores. On a same-store basis, sales fell 0.7%.

"Our first quarter earnings per share met our expectations despite softer-than-expected sales performance," said Gregg Steinhafel, president and chief executive officer.

The Minneapolis-based retailer also said it has completed an agreement to sell nearly half its credit card receivables to financial services firm JPMorgan Chase for $3.6bn.

Target, the US' second-largest discount retailer operates 1,613 general merchandise and food discount stores.