Target Corp reported fourth-quarter profit above expectations on Wednesday boosted by better-than-expected holiday sales and projected slight increase in first-quarter earnings.
Excluding certain items, the Minneapolis-based retailer reported per-share profit of $1.50 during the three months ended January 31 compared to earnings per share of $1.31 a year earlier. The figure came in above the companys recent projection of between $1.43 to $1.47 per share and also better than the analysts estimate of $1.46 a share.
In December the company announced it would exit the Canadian market, just two years since it opened its first store in the country, and earlier this month the board approved a plan to discontinue its Canadian operations, which provided jobs for more than 17 000 people.
The decision the leave the country led to a massive net loss of $2.64 billion, or $4.10 a share, compared to $520 million, or $0.81 a share, in profit during the fourth quarter of the previous year. Target also warned that the exit may also affect future performance.
Revenue edged up 4.1% to $21.8 billion in the quarter from $20.9 billion a year ago, including same-store sales increase of 3.8%, up from the companys projection of 3% gain. The retailer said its transactions increased by 3.2%, while its gross margin edged up to 28.5% from 27.6%.
“We’re pleased with our fourth quarter financial results,” said Chief Executive Brian Cornell. “We’re seeing early momentum in our efforts to transform.”
Mr. Cornell took over the wheel in August from Gregg Steinhafel, following the ill-fated decision the enter the Canadian market and the security breach that occurred during the holiday period in 2013, that prompted the company to upgrade their payment terminals.
During the attack more than 40 million credit card numbers were stolen, marking the biggest data breach at a retailer in history. Despite the anti-hacker software powered by FireEye, which also provides services to the CIA and the Pentagon, Targets headquarters failed to stop the data leakage.
For the current quarter the company projected per-share earnings to range between $0.95 and $1.05. The figures compare with a result of $0.92 a share in 2014 and the $1.04 per-share projection of analysts surveyed by Thomson Reuters. The company said it would provide full-year guidance early next month.
Target gained 0.34% on Tuesday and closed at $76.95 in New York. On Wednesday the stock fell 0.66% to $76.44 at 15:38 GMT, marking a one-year increase of 35.68%. The company is valued at $49.01 billion.
According to the Financial Times, the 23 analysts offering 12-month price targets for Target have a median target of $76.00, with a high estimate of $85.00 and a low estimate of $55.00. The median estimate represents a 1.23 % decrease from the last closing price.
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