Summary
Target Corporation's (TGT) third quarter fiscal year 2017 report shows a modest increase in sales, up 1.4% to $16.7 billion, driven by a 0.9% rise in comparable sales, primarily from increased store traffic. Digital channel sales showed strong growth, increasing by 24%. However, GAAP diluted earnings per share from continuing operations decreased by 17.7% to $0.87 compared to the prior year, impacted by a significant loss on early debt retirement and other adjustments. Despite the earnings dip, the company continued its capital allocation strategy by investing in the business, paying dividends, and repurchasing shares. Financially, Target experienced a notable increase in operating cash flow from continuing operations, largely due to improved payables leverage and changes in vendor payment terms. The company maintained a strong liquidity position with a cash and cash equivalents balance of $2.7 billion. Management highlighted strategic investments in digital channels and a disciplined approach to capital allocation, prioritizing profitable growth, dividends, and share repurchases. The company also reiterated its commitment to reinvestment and shareholder returns, while navigating economic and competitive landscapes.
Financial Highlights
48 data points| Revenue | $16.87B |
| Cost of Revenue | $11.71B |
| Gross Profit | $4.96B |
| SG&A Expenses | $3.73B |
| Operating Income | $847.00M |
| Interest Expense | $251.00M |
| Net Income | $478.00M |
| EPS (Basic) | $0.88 |
| EPS (Diluted) | $0.87 |
| Shares Outstanding (Basic) | 544.50M |
| Shares Outstanding (Diluted) | 547.90M |
Key Highlights
- 1Total sales increased by 1.4% to $16.7 billion in the third quarter of fiscal year 2017.
- 2Comparable sales grew by 0.9%, with digital channel sales experiencing a significant 24% increase.
- 3GAAP diluted earnings per share from continuing operations decreased by 17.7% to $0.87.
- 4A substantial loss on early debt retirement of $123 million ($75 million after tax) impacted net interest expense and earnings.
- 5Operating cash flow from continuing operations significantly increased to $4.4 billion for the nine months ended October 28, 2017, up from $2.8 billion in the prior year, driven by improved payables leverage.
- 6The company reported a strong cash and cash equivalents balance of $2.7 billion as of October 28, 2017.
- 7Target continued its capital allocation strategy by investing in the business, paying dividends ($339 million in Q3), and repurchasing shares ($171 million in Q3).