Quarterly Earnings Analysis - Report on Target

NEW YORK, September 11, 2015 /PRNewswire/ --

ACI Association has initiated research coverage on Target Corp. (NYSE: TGT). Select highlights from the internally released reports are being made available to the general public (included below), with access to the entirety of the research available to new members.

Today, membership is open to readers on a complementary basis at the following URL: http://www.aciassociation.com/reports?keyword=TGT  

Highlights from our TGT Report include:

• Growth in revenue - On August 19, 2015, Target Corp. announced results for the three months ended August 01, 2015. Sales grew marginally to $17.4 billion in Q2 2015, up 2.8% from the $17.0 billion sales reported in the year ago period. Growth in sales reflected a 2.4% increase in comparable sales combined with sales from new stores, which according to Target was in line with its expectations, driven primarily by growth in comparable transactions. Citing research firm Consensus Metrix, a same day Reuters report informed that Target's same-store sales for the quarter was above market expectations of 2.2%. Target informed that comparable sales in signature categories, including Style, Baby, Kids and Wellness, grew three times faster than the company average.

• Operational Performance - Consolidated EBIT was reported at $1.3 billion in Q2 2015, which suggested an increase of 30.0% from $1.0 billion in Q2 2014. EBITDA margin saw an expansion of 100 basis points at 10.9% in Q2 2015 from 9.9% in Q2 2014. EBIT margin, on the other hand, expanded by 90 basis points to 7.7% in Q2 2015 compared to 6.8% in the year-ago period. Further, gross margin stood at 30.9% in Q2 2015, as against 30.4% in Q2 2014, reflecting the benefit of annualizing heightened promotional markdowns in Q2 2014 along with a favorable merchandise mix in Q2 2015.

• Bottom-line Review - Adjusted diluted earnings per share (EPS) from continuing operations stood at $1.22 in Q2 2015, compared to $1.01 in Q2 2014, reflecting an annual growth of 20.6%. As per the Reuters report, analysts on average were expecting the Company to report earnings of $1.11. GAAP EPS from continuing operations, on the other hand, came at $1.21 in Q2 2015, as against $0.61 in the corresponding period of the previous year. The Company reported net earnings of $753 million for Q2 2015 as against net earnings of $234 million in the prior year same period.

• Guidance for Q3 2015 and 2015 - Target informed that it expects the adjusted EPS to be in $0.79 to $0.89 range, compared to an EPS of $0.79 recorded in the third quarter of the previous year. Further, the Company expects the full year adjusted EPS to be in the range of $4.60 to $4.75, as against its previous guidance of $4.50 to $4.65 range. Meanwhile, analysts on average expect an EPS of $4.62 for 2015, according to Thomson Reuters I/B/E/S.

To find out how this influences our rating on Target Corp., read the full report in its entirety here: http://www.aciassociation.com/reports?keyword=TGT

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