Retail
Target's Results Could Have Been Worse -- and That's Where They're Headed
Published:
Last Updated:
On a GAAP basis, Target’s diluted EPS for the quarter totaled $0.37, which excludes costs related to the data breach the company experienced last November, among other things.
Target issued a warning earlier this month about second-quarter results, but it did not say anything then about the second half of the year. The company Wednesday did say something, and none of it was good. For the third quarter, Target guided adjusted EPS at $0.40 to $0.50, well below the current consensus estimate of $0.65. For the full year, the company expects to post adjusted EPS of $3.10 to $3.30, another sharp drop from the previous guidance of $3.60 to $3.90, and well short of the consensus estimate of $3.49.
Target’s former acting CEO and its CFO said:
While results from the quarter didn’t meet our expectations, we are seeing some early signs of progress as we work to improve results in the U.S. and Canada. In the U.S., traffic trends continue to recover and monthly sales are improving, with July comparable sales up more than 1 percent. Better U.S. sales have continued into August, driven by early back-to-school results. In Canada, the team is making important changes to operations and the merchandise assortment with a focus on delivering improved results by this holiday season.
READ ALSO: 10 Brands That Will Disappear in 2015
The company’s new CEO said:
In the coming weeks and months I will be focused on listening and learning from Target team members in the U.S. and Canada, and working with the leadership team to develop guest-focused, strategic plans to position Target for long-run success.
That does not sound like the new CEO has hit the ground running. Perhaps he doesn’t get the urgency of the situation at Target.
Same-store sales in the United States fell by 0.3% sequentially in the second quarter and were flat with year-ago sales. The number of transactions was also down by 1.3%, though the average transaction amount rose by 1.3%. In the second quarter a year ago, transactions were down 1.4% and the average transaction amount was up 2.7%.
Shares were hammered in the premarket, trading down about 1.3% to $58.35, in a 52-week range of $54.66 to $67.25. Thomson Reuters had a consensus analyst price target of around $59.70 before these results were announced.
READ ALSO: States With the Most (and Fewest) Big Spenders
Credit card companies are at war, handing out free rewards and benefits to win the best customers. A good cash back card can be worth thousands of dollars a year in free money, not to mention other perks like travel, insurance, and access to fancy lounges. See our top picks for the best credit cards today. You won’t want to miss some of these offers.
Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.