Retailer Target Corp. (NYSE: TGT) joined the earnings parade this morning when it reported its first quarter numbers. Despite a 7.5% drop in net income, the company was still able to come in above Wall Street estimates.

Going into today's earnings report, analysts had been looking for earnings for the quarter of 71 cents per share, and the company actually was able to post earnings of 74 cents a share, on net income of $602 million. During the same period last year, the company was able to show net income of $651 million.

Revenues came in slightly under analyst estimates, with a reported $14.8 billion, compared to Wall Street's expectations for $14.92 billion. Same store sales were down by 0.7% in the quarter, but revenue was actually higher by 5.4% as the company's new stores were able to overshadow the decrease in revenue that the company witnessed in its stores open more than a year.

When longtime Target Corp. (NYSE: TGT) CEO Bob Ulrich retires soon, he'll leave behind a very impressive legacy. Target, the second-largest discount retailer in the U.S., has grown alongside its larger competitor Wal-Mart Stores, Inc. (NYSE: WMT). While Wal-Mart was opening stores and increasing sales at a blistering pace, Target was no slouch. Even though Wal-Mart grew much faster, Target's strategy worked pretty darn effectively, too.

Target seemed to beat Wal-Mart to the punch on the trends many customers cared about: brand-name clothing, hip marketing, clean and bright stores and very effective marketing and merchandising of its own store-brand product lines. While Wal-Mart became the generic big-box store, Target seemed to be the store shoppers flocked to to stay away from Wal-Mart's lifeless marketing, boring stores and grand-central-station customer traffic. In other words, price isn't everything to every U.S. retailer customer.

Now that Ulrich is retiring, his longtime company sidekick Gregg Steinhafel will be taking over with some lingering challenges that will put him on the hot seat almost immediately. Target is suffering, along with other retailers, from a seemingly-persistent economic slump and from the performance of its credit-card business (which is being hit with defaults due to consumer credit problems nationwide). Although things can be rosy at Target, they aren't for all of its customers at this time. With rising energy prices and the spike in food staple prices recently, Target's store brands like Archer Farms may suffer or need to be priced at the level of brand names -- and then they may lose their appeal to consumers looking for quality alternatives to higher-priced brand names. Steinhafel will have his plate full as he takes over when Ulrich turns 65 --Target's mandated retirement age for the CEO position.