US-based department store retailer Target Corporation has reported better financial reports than its expectations for the first quarter.
During the period under review, its comparable sales decline 1.3 per cent, driven by small declines in both traffic and basket size. First quarter GAAP earnings per share (EPS) from continuing operations were US $ 1.22, compared with US $ 1.02 in first quarter 2016, which included US $ 261 million of pre-tax early debt retirement losses. The company reported Adjusted EPS of US $ 1.21, down 6.1 per cent from US $ 1.29 in 2016.
The retailer’s sales decreased 1.1 per cent to US $ 16.0 billion from US $ 16.2 billion last year, reflecting a comparable sales decline of 1.3 per cent, partially offset by the contribution from new stores. Digital channel sales grew 22 per cent and contributed 0.8 percentage points of comparable sales growth.
“Target’s first quarter financial performance was better than our expectations, reflecting strong execution by our team as they delivered for our guests in a very choppy environment. After starting the quarter with very soft trends, we saw improvement later in the quarter, particularly in March,” said Brian Cornell, Chairman and CEO of Target, adding, “We are in the early stage of a multi-year effort to position Target for profitable, consistent long-term growth, and while we are confident in our plans, we are facing multiple headwinds in the current landscape. As a result, we will continue to plan our business prudently while preparing our team to chase business when we have an opportunity.”
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In second quarter 2017, Target expects a low single digit decline in comparable sales. For full-year 2017, the company continues to expect a low single digit decline in comparable sales.
During the said quarter, EBITDA and EBIT margin rates were 10.9 per cent and 7.4 per cent, respectively, compared with 2016 results of 11.5 per cent and 8.2 percent, respectively.
