MINNEAPOLIS, Jan. 9, 2018 /PRNewswire/ --
- Comparable sales growth of 3.4 percent in the
November/December period was driven by strong traffic growth and
continued strength in digital sales, which are expected to grow
more than 25 percent in 2017.
- The Company raised its fourth quarter and full-year 2017 EPS
guidance, based on the benefit of stronger-than-expected sales and
recently-enacted federal tax reform.
- Stores fulfilled 70 percent of Target's digital volume in
November/December, meaning that stores enabled approximately 80
percent of the Company's comparable sales growth in that
period.
- Comparable sales were positive and accelerated from the
third quarter in all five of the Company's core merchandise
categories: Home, Apparel, Food & Beverage, Hardlines and
Essentials.
- The Company now expects fourth quarter comparable
sales growth in a range around 3.4 percent and full-year 2017
comparable sales growth of more than 1 percent.
- The Company is currently planning for a low single-digit
increase in its 2018 comparable sales and year-over-year stability
in EPS generated by its core business, excluding the benefit from
recently-enacted federal tax reform.
- For more background on holiday performance, please
visit:
https://corporate.target.com/article/2018/01/brian-cornell-holiday-2017-update
Target Corporation (NYSE: TGT) today announced that its
comparable sales in the combined November/December period grew 3.4
percent, compared with the expected range of 0 to 2 percent.
Comparable sales across all of the Company's core merchandise
categories – Home, Apparel, Food & Beverage, Hardlines and
Essentials – were positive and accelerated from the third quarter,
reflecting strong traffic growth, positive store comps and
continued strength in digital sales. Target now expects 2017 will
be the fourth consecutive year in which its digital sales grow more
than 25 percent.
"We are very pleased with our holiday season performance, which
reflects the progress we've made against our strategy throughout
the year," said Brian Cornell,
chairman and chief executive officer of Target Corporation. "We've
positioned our stores at the center of a continually expanding
suite of convenient fulfillment options and made significant
investments in our team, which enabled our stores to fulfill 70
percent of all digital orders in the November/December period. As
we look ahead to 2018, we will build on the foundation we
established this year by launching additional exclusive brands,
enhancing our digital capabilities, opening approximately 30
small-format stores and tripling the size of our remodel program to
more than 325 stores. We will also remain focused on rapidly
scaling up new fulfillment options including Same Day Delivery,
which will be enabled by our acquisition of Shipt, and our recently
launched Drive Up service."
Updated Fourth Quarter and Full-Year 2017
Guidance
Target now expects fourth quarter comparable sales
growth in a range around 3.4 percent, consistent with results in
the November/December period. This would translate into full-year
2017 comparable sales growth of just over 1 percent. Sales from new
and non-mature stores are expected to contribute approximately 70
basis points to Target's fourth quarter sales growth. Combined with
the impact of a 53rd week in the 2017 fiscal year,
Target's total sales are expected to grow more than 9 percent in
the fourth quarter.
For fourth quarter 2017, the Company expects Adjusted
EPS1 of $1.30 to
$1.40, compared to the prior range of
$1.05 to $1.25. This expectation reflects a 6 to
8 cent benefit from a lower
structural tax rate in January resulting from recently-enacted
federal tax reform legislation. Fourth quarter GAAP EPS from
continuing operations is expected to be higher than Adjusted EPS,
reflecting an expected benefit driven primarily by a one-time
change in Target's net deferred tax liabilities resulting from
federal tax reform legislation. The impact of federal tax reform on
the Company's net deferred tax liabilities remains under review and
cannot be determined at this time. The Company expects to
quantify this benefit in its fourth quarter earnings release on
March 6. For full-year 2017, the Company now expects Adjusted
EPS of $4.64 to $4.74, compared with prior guidance of
$4.40 to $4.60. Full-year GAAP EPS from continuing
operations is expected to be higher than Adjusted EPS, reflecting
the previously-noted tax-reform benefit primarily related to
Target's net deferred tax liabilities. In addition, full-year GAAP
EPS from continuing operations will include the following two items
recognized in prior quarters: (1) a 14-cent loss from the net impact of debt
retirement costs; and (2) an 11-cent
tax benefit related primarily to the Company's global sourcing
operations.
Initial Full-Year 2018 Guidance
While Target continues
to develop detailed financial plans for 2018, the Company is
currently planning for a low single-digit increase in its 2018
comparable sales and year-over-year stability in EPS generated by
its core business, excluding the benefit of federal tax reform.
While the Company has not updated its expectations for 2018 capital
expenditures, the benefit of recently-enacted federal tax reform
legislation will create additional cash flow that Target will
deploy in support of its longstanding capital deployment
priorities, including capital investments, dividends and additional
share repurchase.
Combining expectations for stable core-business profitability
with the benefit of federal tax reform, Target expects 2018 GAAP
EPS from continuing operations and Adjusted EPS of $5.15 to $5.45.
Fourth quarter, full-year 2017 and full-year 2018 GAAP EPS from
continuing operations may include the impact of additional discrete
items which will be excluded in calculating Adjusted EPS. The
Company is not currently aware of any such discrete items. All
earnings per share figures refer to diluted EPS.
Miscellaneous
Statements in this release regarding
fourth quarter and full-year 2017 and 2018 earnings per share and
comparable sales 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.
About Target
Minneapolis-based Target Corporation (NYSE:
TGT) serves guests at 1,834 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.
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SOURCE Target Corporation