MINNEAPOLIS — Target Corp. reported a 3.7% increase in second-quarter net earnings to $704 million, or $1.03 per share, beating the consensus projection of 97 cents per share among analysts.
Target Corp. reported a 3.7% increase in second-quarter net earnings to $704 million, or $1.03 per share, beating the consensus projection of 97 cents per share among analysts.
"We’re very pleased with our second-quarter financial results, which benefited from an acceleration in the pace of our comparable-store sales growth," said Gregg Steinhafel, chairman, president and chief executive officer, in a statement. "We continue to focus on strong execution of our strategy, preparing Target to perform well in a variety of economic environments."
Target’s retail segment turned in a 5.1% increase in sales to $15.9 billion that was fueled in part by a 3.9% rise in comparable-store sales. The comp-store performance represented a marked improvement over the 1.7% gain recorded in the second quarter of fiscal 2010, as well as a robust sequential improvement over the 2% increase achieved in the first quarter, when management described sales as weaker than expected.
The company’s credit card business also contributed to the strong bottom-line results, as segment profit rose 14.8% to $171 million. In a research note, William Blair & Co. analyst Mark Miller noted that bad debt expense of $15 million (down from $138 million in the prior-year quarter) was well below his projection of $65 million.
Based on the strong performance, management issued its full-year earnings outlook, which ranges between $4.15 to $4.30 per diluted share, above the average estimate of $4.12 per share among analysts. Target expects to earn 70 cents to 75 cents per share in the third quarter. Miller maintained his Market Perform rating on Target’s stock, but raised his earnings target to $2.25 per share for the year.
