Retail

Target Masks Earnings With Huge Stock Buyback (TGT)

Shares of Target Corp. (NYSE:TGT) are trading higher despite what might be a somewhat disappointing earnings number.  The company posted EPS at $0.56, although First Call had $0.62 EPS as the target.

The language is cautious but not overwhelmingly.  Bob Ulrich, chairman & CEO said, “Our third quarter earnings were disappointing due to soft sales in our higher margin categories, leading to lower-than-expected gross margin in our core retail operations.  However, we have not observed any meaningful change in the intensity of the competitive environment and continue to believe that we are well-positioned to operate in a variety of sales environments going forward.”

The company did announce quite a large kicker.. a $10 Billion share buyback plan, plus update to credit card receivables unit that still has this review in the ‘pending’ status as far as any investors are concerned.

Shares were up marginally after the initial release, but now shares are mixed as the market is digesting weak sales.  Earlier this morning target maintained a 2-4% same store sales growth.

Jon C. Ogg
November 20, 2007

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