Discount retailer Target Corporation offset slow sales with tight cost-control measures, and managed to post a 13% drop in first-quarter profit today (20 May) that beat expectations.

Target, which is locked in a proxy battle with activist investor William Ackman, saw its net earnings fall to US$522m for the three months to 2 May, compared with $602m in the previous year.

Earnings per share in the first quarter decreased 6.8% to $0.69 from $0.74 in the same period a year ago.

Sales however, edged up by 0.4% to reach $14.4bn due to the contribution from new store expansion. Comparable-store sales fell 3.7%.

"The profitability of our first quarter sales was higher than expected due to outstanding gross margin and expense rate performance," said Gregg Steinhafel, chairman, president and CEO.

Target is in a long-running battle with Pershing Square, the hedge fund led by activist investor Ackman, who wants to nominate himself and four others to the retailer's board as he looks to revitalise the business.

The boardroom struggle has rumbled on this month with the discount retailer insisting its nominees to the board would be best for the business.