|
Target 1Q hits bull's-eye
|
 |
May 22, 2001: 9:31 a.m. ET
Discount retailer posts higher profit, sees 15% average annual EPS growth
|
NEW YORK (CNNfn) - Discount retailer Target Corp. reported higher first-quarter profit than a year earlier that matched Wall Street's expectations Tuesday, and said it remains confident of achieving earnings per share growth of 15 percent or more for the full year.
The company also said during a conference call with analysts Tuesday that it anticipates meeting Wall Street's second-quarter estimates of 30 cents a share and full-year forecasts of $1.55 a share, according to analysts polled by research firm First Call. But Target cautioned that if economic growth slows further, it could fall short of those expectations.
"In a more difficult environment, we could fall short of these forecasts," Chief Financial Officer Douglas Scovanner told analysts.
For the quarter ended May 5, Minneapolis-based Target (TGT: up $1.20 to $38.95, Research, Estimates) -- which also operates Marshall Field's and Mervyn's stores and its target.direct direct marketing arm -- reported net earnings of $254 million, or 28 cents a share. That was up from $239 million, or 26 cents a share, a year earlier.
Revenue increased 7.7 percent to $8.3 billion from $7.7 billion.
"We are pleased with our first-quarter results, particularly in view of the strength of last year's performance," CEO Bob Ulrich said. "We remain comfortable that we are well-positioned to meet near-term economic and competitive challenges, and deliver reasonable growth in earnings per share for the full year."
Target has carved a niche for itself as an upscale discount retailer. The former Dayton-Hudson Corp. sells apparel and home goods, which some shoppers see as fashioable, at prices competitive with rivals Wal-Mart Stores Inc.(WMT: Research, Estimates), Kmart Corp. (KM: Research, Estimates) and Kohl's Corp. (KSS: Research, Estimates).
Despite the recent economic slowdown that has crimped consumer spending, Target continues to post relatively healthy sales gains. The company reported increased sales at stores open a year or more for both March and April. The March gain of 2.4 percent, while slightly below the company's expectations, contrasted with negative numbers reported by many others. April same-store sales rose 1.7 percent.
The economic slowdown has more consumers bargain-hunting at discount chains such as Target as they worry about layoffs and higher energy prices. But Target's earnings stand out from the other chains' because of its fashionable mix of products at reasonable prices, analysts have said.
The company's strategy has worked so well that some analysts have taken to calling it "Tar-zhay" because it's the choice of consumers whose wealth evaporated in the recent market downturn rather than more high-end specialty shops.
Separately, two specialty retailers reported first-quarter results Tuesday, with Staples Inc. (SPLS: Research, Estimates) and Talbots Inc. (TLB: Research, Estimates) both matching Wall Street forecasts. 
from staff and wire reports
|
|
|
|
|
 |
|
