Target reports EPS in-line, revs/comps in-line; guides Q3 EPS below consensus; guides FY15 EPS below consensus
Reports Q2 (Jul) earnings of $0.78 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate of $0.78; revenues rose 1.7% year/year to $17.41 bln vs the $17.38 bln consensus. TGT reports Q2 US comps flat vs 0-2% prior guidance and flat estimate.
Co guided for EPS of ~$0.78 vs. the $0.91 consensus on Aug 5.
US: In second quarter 2014, sales increased 0.7 percent to $17.0 billion from $16.8 billion last year, reflecting the contribution from new stores and flat comparable sales. Segment earnings before interest expense and income taxes (EBIT) were $1,160 million in second quarter 2014, a decrease of 12.8 percent from $1,330
Canada: Second quarter Canadian Segment sales increased 63.1 percent to $449 million from $275 million last year, reflecting the contribution from new stores partially offset by an 11.4 percent decline in comparable sales. million in 2013.
Co issues downside guidance for Q3, sees EPS of $0.40-0.50, excluding non-recurring items, vs. $0.66 Capital IQ Consensus Estimate.
Co issues downside guidance for FY15, lowers EPS to $3.10-3.30, excluding non-recurring items, from $3.60-3.90 vs. $3.46 Capital IQ Consensus Estimate.
"While results from the quarter didn't meet our expectations, we are seeing some early signs of progress as we work to improve results in the U.S. and Canada," said John Mulligan, executive vice president and chief financial officer of Target Corporation. "In the U.S., traffic trends continue to recover and monthly sales are improving, with July comparable sales up more than 1 percent. Better U.S. sales have continued into August, driven by early back-to-school results. In Canada, the team is making important changes to operations and the merchandise assortment with a focus on delivering improved results by this holiday season."