Target Hits the Mark on Earnings

The company updated its guidance for the full year and issued new guidance for the second quarter. The EPS outlook for the full year was raised to a range of $4.50 to $4.65, compared to the previous level of $4.45 to $4.65. For the second quarter, Target expects EPS to be $1.04 to $1.14. The consensus EPS estimates call for $4.56 for the full year and $1.12 for the second quarter.

Target returned cash through share repurchases for the first time since the second quarter of 2013, with purchases of $562 million in shares of common stock in the first quarter. Including dividends, the company returned $895 million to shareholders in the first quarter, more than 140% of net income.

ALSO READ: The 10 Most Popular Stores in America

This quarter the company also incurred breach-related expenses of $3 million, compared with $18 million of net pretax expense last year. Since the fourth quarter 2013, Target has incurred net expense related to the data breach of $166 million, reflecting $256 million of gross expense, partially offset by the recognition of a $90 million insurance receivable.

Brian Cornell, chairman and CEO of Target, commented on earnings:

We’re pleased with our first quarter traffic and sales, particularly in our signature categories, which drove better-than-expected profitability through improved gross margin and continued expense management. We’re encouraged to see early progress on our strategic priorities, including strong sales growth in Apparel, Home and Beauty, nearly 40 percent growth in digital sales, and positive traffic in both our stores and digital channels. We continue to benefit from strong execution by our stores team, who overcame weather challenges and West Coast port delays to deliver outstanding guest service in the first quarter.

Shares of Target closed Tuesday down 0.6% to $77.92. Following the earnings release, shares were up 0.6% at $78.40 in premarket trading Wednesday. The stock has a consensus analyst price target of $79.82 and a 52-week trading range of $55.25 to $83.98.

ALSO READ: 5 Top Pick Modern Bricks-and-Clicks Retailers to Buy Now