The Wall Street Journal reports Target (TGT) will cut back on store expansion and tighten credit-card terms after the second largest US retailer reported fiscal second quarter results fell 7.6% due to weak sales and credit-card writedowns.

For the quarter, the company earned 82 cents a share, which beat analyst estimates by 6 cents. Revenues grew 5.6% to $14.97 billion while same-store sales declined 0.4% in the quarter.

Profits from credit card operations dropped 65% to $74 million. Last year the business earned $213 million. Further, the company sold a half interest in its credit card receivables to J.P. Morgan Chase (JPM) for $3.6 billion.

Chief Financial Officer Doug Scovanner said the company will trim about 20 stores from its new store openings next year. It had previously planned to open between 90 and 100 new stores through next year.

Scovanner also said economic conditions continue to be volatile with weak sales in the first week of August, but it did rebound shortly after. The total use of credit cards for purchases was flat in the first quarter and down in the second quarter and that is determining the company’s same-store sales.

See Professor Macke’s column today, Time to Bet on MGM Mirage? 

From the Bull Pen: Bulls can keep Kroger (KR) on the radar. Can the stock hold the uptrend from the April low? Sell-stops can be set near $27.50.

From the Bear Cave: We’ve spoken about the challenges companies like Target face going forward. Bears can play the downside with buy-stops above the 200 DMA ($52).