Target Reports First Quarter 2018 Earnings

First quarter traffic growth of 3.7 percent is the strongest quarterly performance in over 10 years.
First quarter digital sales increased 28 percent, on top of 21 percent growth in first quarter 2017.
GAAP EPS from continuing operations were $1.33, up 9.1 percent from last year. Adjusted EPS1 were $1.32, up 9.4 percent from last year.
The Company saw broad market share gains across its core merchandise categories.
In the first quarter the Company completed 56 remodels, opened 7 new stores, introduced 3 new brands and a successful limited-time collaboration with Hunter, launched its new Drive-Up service in more than 250 stores, expanded Target Restock nationwide and rolled out same-day delivery from more than 700 stores, enabled by its recent acquisition of Shipt.
In the second quarter, Target expects an acceleration in its comparable sales into the low to mid single-digit range.
The midpoint of Target’s second quarter EPS guidance range is approximately 15 percent higher than second quarter 2017 GAAP EPS from continuing operations of $1.21 and Adjusted EPS of $1.22.
For additional media materials, please visit:
https://corporate.target.com/article/2018/05/q1-2018-earnings

Target Corporation (NYSE: TGT) today announced its first quarter 2018 financial performance2, including first quarter comparable sales growth of 3.0 percent and 3.7 percent traffic growth. The Company reported GAAP earnings per share (EPS) from continuing operations of $1.33 in first quarter 2018, up 9.1 percent from $1.21 in first quarter 2017. First quarter Adjusted EPS were $1.32, up 9.4 percent from $1.20 in first quarter 2017. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS.

“We’re very pleased that our business continued to generate strong traffic and sales growth in the first quarter, as we made significant progress in support of our long-term strategic initiatives,” said Brian Cornell, chairman and chief executive officer of Target Corporation. “Our first quarter performance reflects the benefit of our unique multi-category portfolio. Strong sales growth in our home, essentials and food & beverage categories offset the impact of delayed sales in temperature-sensitive categories, which accelerated rapidly in recent weeks as weather improved across the country. Additionally, our team is delivering excellent execution and guest service every day, and momentum in our traffic has accelerated in the second quarter. As a result, we expect Target’s second quarter comparable sales growth will move into the low to mid single-digit range, and the midpoint of our second quarter EPS guidance represents approximately 15 percent growth over last year.”

Total revenue of $16.8 billion increased 3.4 percent from $16.2 billion last year, reflecting sales growth of 3.5 percent combined with a slight decline in other revenue. First quarter sales growth reflected comparable sales growth of 3.0 percent combined with the contribution from non-mature stores. Comparable digital channel sales grew 28 percent and contributed 1.1 percentage points of comparable sales growth. Operating income was $1,041 million in first quarter 2018, down 9.9 percent from $1,155 million in 2017.

First quarter operating income margin rate was 6.2 percent, compared with 7.1 percent in 2017. First quarter gross margin rate was 29.8 percent, compared with 30.0 percent in 2017, reflecting pressure from digital fulfillments costs and sales mix, partially offset by the benefit of the Company’s cost saving efforts and the net impact of changes to the Company’s pricing and promotions. First quarter SG&A expense rate was 21.1 percent in 2018, compared with 20.7 percent in 2017, driven by higher compensation costs, including investments in store team member hours and wage rates.
more detail at: http://investors.target.com/phoenix.zhtml?c=65828&p=irol-newsArticle&ID=2350388

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