Target Lifts Outlook
August 19 2015 - 8:31AM
Dow Jones News
By Chelsey Dulaney
Target Corp. on Wednesday lifted its profit outlook for the year
after posting stronger-than-expected earnings in its second quarter
and its fourth straight quarter of same-store sales growth.
The company now expects earnings of $4.60 to $4.75, compared
with its prior guidance of $4.50 to $4.65 a share.
Target's results have been improving under Chief Executive Brian
Cornell, who took the helm of the big box chain a year go. The
company has exited its struggling Canada business, reshuffled its
executive team, and been pushing digital sales.
"While the momentum in our financial results is encouraging, we
have much more to accomplish, "Mr. Cornell said in a news release.
"Looking ahead, we are focused on making further progress against
our strategic priorities and are committed to improving operations
as we move through the important back-to-school, back-to-college
and holiday seasons."
For the current quarter, Target forecast earnings of 79 cents to
89 cents a share. Analysts polled by Thomson Reuters had forecast
86 cents a share.
In the latest quarter, sales excluding newly opened and closed
locations rose 2.4%, helped by strength in its style, baby, kids
and wellness categories. Consensus Metrix had forecast 2.2%
growth.
In all for the quarter, earnings from continuing operations
doubled to $1.21 a share from 61 cents a share a year earlier.
Excluding one-time items, earnings were $1.22 a share.
Target had forecast per-share earnings of $1.04 to $1.14, while
analysts polled by Thomson Reuters were looking for $1.11 a
share.
Total sales grew 2.8% to $17.4 billion, in line with analysts'
expectations, according to Thomson Reuters.
Digital sales grew 30%.
Target booked $20 million in after-tax losses in the quarter
related to exiting its Canada business
The company earlier this week announced two major changes to its
management team, naming Chief Financial Officer John Mulligan to
the newly created chief operating officer role and hiring Cathy
Smith, former finance chief at Express Scripts Holding Co., as
CFO.
On Tuesday, Target reached an agreement with Visa Inc. that will
reimburse card issuers as much as $67 million for costs incurred by
its data breach during the 2013 holiday shopping season and said it
is working on a similar pact with MasterCard Inc.
Target's results came after Wal-Mart Stores Inc. executives
warned Tuesday that profits will miss their goals this year, an
admission that the world's largest retailer is spending heavily to
generate even modest sales growth.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 19, 2015 08:16 ET (12:16 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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