MINNEAPOLIS: Target’s Neiman Marcus collaboration did not turn out to be a holiday gift to the retailer.

The No. 2 discount chain reported fiscal fourth-quarter net income dipped 2 percent as it dealt with intense competition during the crucial holiday season. Still, the company’s forecast for 2013 indicated it might beat many analysts’ expectations.

“We’re pleased with Target’s fourth-quarter performance, particularly in the face of a highly promotional retail environment and continued consumer uncertainty,” Chairman, President and CEO Gregg Steinhafel said in a news release.

The big-box retailer, known for its cheap but trendy merchandise, had high hopes for the collection of gifts made in partnership with luxury department store Neiman Marcus. The retailers rolled out the line of gifts from 24 designers, including Oscar de la Renta and Diane von Furstenberg, on Dec. 1. But just weeks later, Target was offering big discounts — up to 75 percent off — to clear the shelves of unsold merchandise.

Also, during the critical shopping months of November and December, Target embraced a number of different strategies, including matching the price of online competitors such as Amazon.com, Walmart.com, Bestbuy.com and Toysrus.com. It was an attempt to combat the shopping practice that has come to be known as “showrooming,” in which people use smartphones while they’re in stores to look for cheaper prices online.

But the initiatives did not spur customers to buy more during the holiday shopping period, which is critical for retailers as it can make up as much as 40 percent of their annual revenue.

The number of transactions fell 1 percent during the quarter, although the amount spent per transaction rose 1.4 percent.

The company said its gross margin — the percentage of each dollar in revenue made that a company actually keeps — declined during the quarter because of holiday markdowns.

Edward Jones analyst Brian Yarbrough said the Neiman Marcus collection was small, so it didn’t have a huge impact on results. The bigger problem was overall seasonal merchandise that didn’t sell during a slow December.

“I think that was the biggest issue in this quarter was leftover seasonal inventory that didn’t sell, so they cleared it out in January,” he said. But overall it was a decent report, he added.

“Results were in line, and forward guidance was pretty solid,” he said.

For the three months ended Feb. 2, Target earned $961 million, or $1.47 per share, for the period ended Feb. 2. That’s down from $981 million, or $1.45 per share, a year earlier.

Removing costs including interest expense related to credit cards and a provision for income taxes, earnings were $1.65 per share. That tops the forecast of analysts polled by FactSet for earnings of $1.47 per share.

Target had forecast adjusted earnings between $1.64 and $1.74 per share.

Revenue climbed 7 percent to $22.73 billion from $21.29 billion. This met Wall Street’s expectations. During the quarter, revenue at stores open at least a year edged up 0.4 percent.

For the full year, the Minneapolis company with 11 stores in the Akron-Canton area earned $3 billion, or $4.52 per share. A year earlier, it earned $2.93 billion, or $4.28 per share. Adjusted earnings were $4.76 per share.

Annual revenue was up 5 percent to $72 billion from $68.5 billion.