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MINNEAPOLIS — Target Corp. rebounded smartly in the fourth quarter after a harrowing fiscal 2014 that saw the retailer withdraw from its failed entry into Canada.
Target Corp. rebounded smartly in the fourth quarter after a harrowing fiscal 2014 that saw the retailer withdraw from its failed entry into Canada.
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| Brian Cornell |
Both reported and adjusted earnings per share and sales for the final period beat analysts’ estimates, and management forecasts year-over-year growth for first quarter earnings.
As a result of its previously announced exit from Canada, Target booked an after-tax loss from discontinued operations of $3.6 billion for the fourth quarter and $4.09 billion for the year. The retailer consequently reported a net loss of $2.64 billion, or $4.10 per diluted share, for the final quarter and $1.64 billion, or $2.56 per diluted share, for the full year.
However, income from continuing operations for the fourth quarter soared 23.1% to $960 million, or $1.49 per share, as sales advanced 4.1% to $21.75 billion, driven by a solid 3.8% rise in comparable-store sales. Importantly, the comp-store sales growth was fueled mainly by a 3.2% increase in customer traffic, suggesting that Target is succeeding in luring back customers who may have stayed away since the data breach that occurred late in 2013.
Excluding various special items, adjusted fourth quarter earnings of $1.50 per diluted share exceeded the consensus estimate of $1.46 per share among analysts polled by Thomson Reuters, while the top-line results also beat the $21.63 billion expected by analysts.
"We’re pleased with our fourth quarter financial results, which were driven by better-than-expected sales and particularly strong performance in our signature categories — style, baby, kids and wellness," said chairman and chief executive officer Brian Cornell. "Were seeing early momentum in our efforts to transform Target, and our team is entering the new fiscal year with a singular focus on continuing to differentiate our merchandise assortment and shopping experience while controlling costs by reducing complexity and simplifying the way we work."
Full-year income from continuing operations declined 9.1% to $2.45 billion, or $3.83 per share, as sales rose 1.9% to $72.62 billion. On an adjusted basis, however, earnings were $4.27 per share, well ahead of the $3.96 per share average forecast by analysts.
For the first quarter of fiscal 2015, Target is projecting adjusted earnings between 95 cents and $1.05 per diluted share, up from 92 cents per diluted share in the first quarter of fiscal 2014. Analysts are looking for $1.04 per share.
