Discount retail giant Target Corporation has blamed an "intensely promotional holiday season" for a 5.2% drop in fourth quarter profit, but says sales have since picked up.

Net income in the three months to 28 January fell to $981m or $1.45 per share, from $1.04bn or $1.45 per share a year earlier. Stripping out certain items saw earnings rise to $1.49.

The Minneapolis-based company said sales in its US retail stores rose 3.3% to $20.9bn from $20.3bn, thanks to a 2.2% rise in same-store sales and the contribution from new stores. Earnings before interest expense and income taxes (EBIT) rose 1.1% to $1.625bn.

For the year, profit edged up 0.3% to $2.93bn or $4.28 per share, with sales rising 4.1% to $68.5bn. Comparable-store sales were up 3.0%.

"For the full year, our US businesses generated 14.3% growth in adjusted earnings per share, and we experienced our strongest growth in comparable-store sales since 2007," said chairman and CEO Gregg Steinhafel.

Excluding expenses related to its move into the Canadian market, the retailer expects full-year earnings in the year ahead will rise to $4.55 to $4.75 per share. In the first quarter, earnings are seen in the range of $0.97 to $1.07 per share.