Summary
Target Corporation's first quarter 2012 results show modest growth, with total revenues increasing 5.9% to $16.9 billion. Diluted earnings per share (EPS) rose 5.0% to $1.04, or 11.5% to $1.11 on an adjusted basis that excludes Canadian market entry costs and tax benefits. The U.S. Retail Segment was the primary driver of this growth, with sales up 6.1% and comparable-store sales increasing by 5.3%. The company also saw improvements in its Selling, General, and Administrative (SG&A) expense rate due to payroll efficiencies and strong sales leverage. While the U.S. Retail segment performed well, the U.S. Credit Card Segment experienced a decline in profit due to the prior year's reserve reductions and a smaller portfolio, leading to lower finance charge revenue. The Canadian segment continued to incur start-up losses, contributing to an overall segment loss. Target is actively managing its capital through share repurchases and dividend payments, and is exploring the potential sale of its credit card receivables portfolio. The company maintains a strong liquidity position and expects continued access to capital markets.
Financial Highlights
45 data points| Revenue | $16.87B |
| Cost of Revenue | $11.54B |
| Gross Profit | $5.33B |
| SG&A Expenses | $3.39B |
| Operating Income | $1.28B |
| Interest Expense | $184.00M |
| Net Income | $697.00M |
| EPS (Basic) | $1.05 |
| EPS (Diluted) | $1.04 |
| Shares Outstanding (Basic) | 666.30M |
| Shares Outstanding (Diluted) | 672.40M |
Key Highlights
- 1Total revenues increased by 5.9% to $16.9 billion for the first quarter of 2012 compared to the prior year.
- 2Diluted EPS grew 5.0% to $1.04, and adjusted diluted EPS (excluding Canadian entry and tax items) rose 11.5% to $1.11.
- 3U.S. Retail Segment sales increased by 6.1%, driven by a 5.3% comparable-store sales growth.
- 4Selling, General & Administrative (SG&A) expense rate improved to 19.9% from 20.4% due to payroll efficiencies and sales leverage.
- 5U.S. Credit Card Segment profit declined due to annualizing prior year reserve reductions and a smaller portfolio, impacting finance charge revenue.
- 6Canadian Segment reported a loss before interest, taxes, depreciation, and amortization of $55 million due to start-up costs.
- 7Target completed a $10 billion share repurchase program and initiated a new $5 billion program, repurchasing $604 million in shares during the quarter.