--> TGT US : trading flat pre-market
Target misses by $0.01, reports revs in-line; guides Q2 EPS below consensus; lowers FY15 EPS guidance
Reports Q1 (Apr) earnings of $0.70 per share, $0.01 worse than the Capital IQ Consensus Estimate of $0.71; revenues rose 2.1% year/year to $17.05 bln vs the $17.01 bln consensus.
Co issues downside guidance for FY15, lowers EPS to $3.60-3.90 from $3.85-4.15 vs. $4.00 Capital IQ Consensus.
- Rev increase reflects the contribution from new stores partially offset by a (0.3%) decrease in comparable sales vs. (2)-0% guidance.
- Segment earnings before interest expense and income taxes (EBIT) were $1,072 million in first quarter 2014, a decrease of 13.5 percent from $1,239 million in 2013.
- Canadian Segment Results
- In Q1, the Canadian Segment generated sales of $393 million, compared with $86 million in first quarter 2013 when Target opened its first 24 Canadian stores.
- Segment EBIT was $(211) million in the first quarter 2014 compared with $(205) million in 2013. First quarter 2014 gross margin rate of 18.7 percent reflects the continued impact of efforts to clear excess inventory, including long lead-time receipts. This compares to first quarter 2013 gross margin rate of 38.4 percent, which benefitted from a lack of clearance markdowns due to the short time stores had been open. SG&A expense rate of 55.4 percent in first quarter 2014 compares with 223.9 percent last year, reflecting increased scale in the Canadian Segment and pre-opening costs in last year's results.
Co issues downside guidance for FY15, lowers EPS to $3.60-3.90 from $3.85-4.15 vs. $4.00 Capital IQ Consensus.