Company Expects Positive Second Quarter Comparable Sales and EPS Above the High End of the Prior Guidance Range
Target Corporation (NYSE: TGT) today updated its guidance for second quarter 2017 comparable sales and earnings per share (EPS). As a result of improved traffic and sales trends through the first two months of the quarter, Target is now expecting to report a modest increase in its second quarter comparable sales. In addition, the Company now expects to report second quarter GAAP and Adjusted EPS1 above the high end of its previous guidance range of $0.95 to $1.15. Both GAAP and Adjusted EPS are expected to reflect a 5 to 9 cent benefit driven by the net tax effect of the Company’s global sourcing operations. In addition, GAAP EPS is expected to reflect 2 to 3 cents of pressure related to the unfavorable resolution of tax matters. Target plans to report its second quarter 2017 financial results on Wednesday, August 16.
“Target’s recent progress reinforces our confidence and commitment to our strategy as we build an even better Target for tomorrow. Following better-than-expected results in the first quarter, we’ve seen additional, broad-based improvement in traffic and category sales trends in the second quarter, despite continued challenges in the competitive environment” said Brian Cornell, chairman and CEO of Target. “Our team is energized and focused on enhancing and modernizing the Target shopping experience, and our guests are responding. The launch of Cloud Island in May was a success, and our team will be rolling out four more exclusive brands across Home and Apparel in the next few months, in support of our plan to launch 12 new brands by the end of 2018. We are also pleased with initial results of the Twin Cities rollout of Target Restock, providing next-day delivery of a shopping-cart-sized shipment from an assortment of more than 10,000 essential items.”
Statements in this release regarding second quarter 2017 comparable sales and earnings per share guidance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties which could cause the Company’s actual results to differ materially. The most important risks and uncertainties are described in Item 1A of the Company’s Form 10-K for the fiscal year ended Jan. 28, 2017. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update any forward-looking statement.
In addition to the GAAP earnings per share guidance provided in this release, the Company provides Adjusted EPS guidance for the three-month period ending July 29, 2017. Adjusted EPS is not in accordance with, or an alternative for, generally accepted accounting principles in the United States (GAAP). Management believes Adjusted EPS is useful in providing period-to-period comparisons of the results of the Company’s ongoing retail operations. The most comparable GAAP measure for Adjusted EPS is diluted EPS from continuing operations. Adjusted EPS should not be considered in isolation or as a substitution for analysis of the Company’s results as reported under GAAP. Other companies may calculate Adjusted EPS differently than the Company does, limiting the usefulness of the measure for comparisons with other companies.
Minneapolis-based Target Corporation (NYSE:TGT) serves guests at 1,807 stores and at Target.com. Since 1946, Target has given 5 percent of its profit to communities, which today equals millions of dollars a week. For more information, visit Target.com/Pressroom. For a behind-the-scenes look at Target, visit Target.com/abullseyeview or follow @TargetNews on Twitter.
1 Adjusted EPS, a non-GAAP financial measure, excludes the impact of certain discretely-managed items. As of this release, the only expected difference between second quarter 2017 GAAP and Adjusted EPS is 2-3 cents of income tax expense relating to unfavorable resolution of tax matters, which will be reflected in GAAP EPS but excluded from Adjusted EPS.