10-QPeriod: Q1 FY2011

TARGET CORP Quarterly Report for Q1 Ended May 1, 2010

Filed May 28, 2010For Securities:TGT

Summary

Target Corporation's (TGT) first quarter of 2010 filing shows a robust performance, with total revenues increasing to $15.59 billion, up from $14.83 billion in the prior year period. This growth was driven by a 5.5% increase in retail sales, partly due to a 2.8% comparable-store sales increase, and a significant improvement in the credit card segment's profitability. Net earnings rose to $671 million ($0.90 per diluted share) from $522 million ($0.69 per diluted share) in the comparable prior year period, indicating strong operational execution and favorable credit trends. The company's financial position remains solid, with total assets of $43.32 billion at the end of the quarter. While cash and cash equivalents decreased due to debt repayment and share repurchases, operating cash flow remained strong at $1.16 billion. Target demonstrated a commitment to returning capital to shareholders through a 3.9% increase in declared dividends and continued share repurchases. The company also highlighted its efforts to manage market risks and maintain compliance with financial regulations.

Financial Highlights

46 data points
Beta

Revenue

$15.59B

33.2% Gross Margin

Net Income

$671.00M

4.3% Net Margin

EPS (Diluted)

$0.90

Total Assets

$43.32B

Free Cash Flow

$751.00M

Financial Statements
Beta
Revenue$15.59B
Cost of Revenue$10.41B
Gross Profit$5.18B
SG&A Expenses$3.14B
Interest Expense$187.00M
Net Income$671.00M
EPS (Basic)$0.91
EPS (Diluted)$0.90
Shares Outstanding (Basic)739.90M
Shares Outstanding (Diluted)745.70M

Key Highlights

  • 1Total revenues increased by 5.1% to $15.59 billion for the quarter ended May 1, 2010, compared to $14.83 billion in the prior year period.
  • 2Net earnings grew by 28.5% to $671 million, with diluted earnings per share rising to $0.90 from $0.69 in the prior year.
  • 3Retail segment sales increased by 5.5% to $15.16 billion, driven by comparable-store sales growth of 2.8%.
  • 4Credit card segment profit more than doubled to $111 million, primarily due to a significant reduction in bad debt expense.
  • 5Operating cash flow was strong at $1.16 billion, supporting capital expenditures and debt reduction.
  • 6The company declared a quarterly dividend of $0.17 per share, an increase of 3.9% year-over-year, and repurchased $394 million of common stock during the quarter.

Frequently Asked Questions

Target reported a 5.1% increase in total revenues, reaching $15.59 billion for the quarter ended May 1, 2010, up from $14.83 billion in the same period of the previous year. This growth was primarily fueled by a 5.5% rise in retail segment sales, which benefited from a 2.8% increase in comparable-store sales.

Profitability improved significantly. Net earnings increased by 28.5% to $671 million, and diluted earnings per share rose to $0.90 from $0.69 in the prior year's first quarter. This improvement was driven by both the retail segment's sales growth and margin improvements, as well as a substantial increase in profitability from the credit card segment due to lower bad debt expenses.

Target's credit card segment showed strong performance improvement, with segment profit increasing to $111 million from $39 million in the prior year. This was largely attributed to a significant decrease in bad debt expense, reflecting improved credit trends. The company also announced changes to its credit card offerings, discontinuing new Target Visa applications and focusing on the Target Card.

Target generated strong operating cash flow of $1.16 billion during the quarter. The company used this cash, along with its existing cash position, to fund capital expenditures, repay $1.2 billion in debt, and continue its share repurchase program. Target also increased its quarterly dividend by 3.9% to $0.17 per share.