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Target reported disappointing Q1 results

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Target CorporationTarget Corporation reported first quarter net earnings of $498 million, or $0.77 per share. The company lowered EPS expectation for the full year.


Losses related to the early retirement of debt were 41 cents per share, EPS dilution related to the Canadian Segment were 24 cents, and net accounting gains of 36 cents associated with the sale of Target's entire consumer credit card receivables portfolio to TD Bank Group.

Adjusted earnings per share, a measure the company believes is useful in providing period-to-period comparisons of the results of its U.S. operations, were $1.05 in first quarter 2013, down 5.0 percent from $1.11 in 2012.

"Target's first quarter earnings were below expectations as a result of softer-than-expected sales, particularly in apparel and other seasonal and weather-sensitive categories. While we are disappointed in our first quarter performance, we remain confident in our strategy, and we continue to invest in initiatives, including Canada, our digital channels and CityTarget, that will drive Target's long-term growth, said Gregg Steinhafel, chairman, president, and CEO of Target Corporation.

In second quarter 2013, the company expects adjusted EPS of $1.09 to $1.19 and GAAP EPS of $0.90 to $1. The difference between the adjusted and GAAP EPS ranges reflects expected dilution of approximately 16 cents related to Canadian operations, and 3 cents related to the expected reduction in the beneficial interest asset recorded on the sale of our credit card portfolio.

For full-year 2013, the company now expects adjusted EPS of $4.70 to $4.90, compared with prior guidance of $4.85 to $5.05. GAAP EPS is expected to be $4.12 to $4.32.

In the first quarter, Target returned $779 million to shareholders through dividends and share repurchase.

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