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Wednesday, May 18, 2016

=Target (TGT) reported earnings on Wed 5/18/16 (b/o)




Target beats by $0.10, reports revs in-line with comps below guidance; guides Q2 EPS, comps below consensus; FY17 EPS guidance achievable  :
  • Reports Q1 (Apr) earnings of $1.29 per share, excluding non-recurring items, $0.10 better than the Capital IQ Consensus of $1.19; revenues fell 5.4% year/year to $16.2 bln vs the $16.31 bln Capital IQ Consensus. 
  • Comps +1.2% vs. +1.5-2.5% guidance (estimates near +1.6%); more than offset by the impact of the sale of the pharmacy and clinic businesses.
    • Comparable digital channel sales grew 23% and contributed 0.6 % points to comparable sales growth.
    • EBIT +4.9% to $1.32 bln.
    • EBITDA and EBIT margin rates were 11.5% and 8.2%, respectively, compared with 10.5% and 7.4%, respectively, in 2015.
    • First quarter gross margin rate was 30.9%, compared with 30.4% in 2015, reflecting the benefit of the sale of the Company's pharmacy and clinic businesses, combined with the benefit of the Company's cost savings initiatives, partially offset by investments in promotions.
  • Co issues downside guidance for Q2, sees EPS of $1.00-1.20, excluding non-recurring items, vs. $1.36 Capital IQ Consensus; comps flat to down 2% vs. ests near +1.9%.
  • Co sees FY17 EPS within $5.20-5.40 prior range achievable, excluding non-recurring items, vs. $5.27 Capital IQ Consensus Estimate.

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