Discount-store operator Target Corp. (TGT) on Wednesday reported a 29 percent decline in profit for the first quarter, reflecting soft sales in seasonal and weather-related categories. Revenue for the quarter missed analysts' expectations.
Looking ahead, the company forecast earnings for the second quarter above Street estimates, but lowered its adjusted earnings outlook for fiscal 2013. The company's shares are down more than 2 percent in pre-market trades.
Gregg Steinhafel, chairman, president, and chief executive officer of Target said, "Target's first quarter earnings were below expectations as a result of softer-than-expected sales, particularly in apparel and other seasonal and weather-sensitive categories. While we are disappointed in our first quarter performance, we remain confident in our strategy, and we continue to invest in initiatives, including Canada, our digital channels and CityTarget, that will drive Target's long-term growth."
Minneapolis, Minnesota-based Target's net earnings for the first quarter were $498 million or $0.77 per share, down from $697 million or $1.04 per share in the year-ago period.
The latest quarter's result include losses related to the early retirement of debt of $0.41 per share, dilution related to the Canadian Segment of $0.24 per share, and net accounting gains of $0.36 per share associated with the sale of Target's entire consumer credit card receivables portfolio to TD Bank Group.
Excluding items, adjusted earnings for the quarter was $1.05 per share, compared to $1.11 per share in the same period last year. On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $0.87 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter declined 1 percent to $16.71 billion from $16.87 billion in the prior-year quarter and missed analysts' consensus estimate of $16.82 billion.
In mid-March, Target said it completed the sale of its entire consumer credit card portfolio to TD Bank Group (TD, TD.TO) for $5.7 billion, the gross value of the outstanding receivables at the time of closing.
Following the sale of the U.S. credit card portfolio, Target's historical U.S. Retail Segment and U.S. Credit Card Segment results were combined to form a new U.S. Segment.
Sales in the company's U.S. segment edged up 0.5 percent from last year to $16.62 billion, on a 0.6 percent decrease in comparable-store sales combined with the contribution from new stores.
Target opened its first 24 Canadian stores in the first quarter as part of its plan to open 124 stores in Canada by the end of the year. Sales at the segment were $86 million in the quarter with a gross margin rate of 38.4 percent.
Looking ahead to the second quarter, Target forecasts adjusted earnings in a range of $1.09 to $1.19 per share, and reported earnings of $0.90 to $1.00 per share. Analysts expect the company to report earnings of $1.06 per share for the quarter.
For fiscal 2013, Target now forecasts adjusted earnings of $4.70 to $4.90 per share, down from the prior guidance range of $4.85 to $5.05 per share. Analysts expect the company to earn $4.50 per share for the year.
The company projects fiscal reported earnings of $4.12 to $4.32 per share.
The reported earnings outlook is about $0.58 lower than the adjusted earnings forecast due to losses related to the early retirement of debt of $0.42 per share, dilution related to the Canadian Segment of about $0.45 per share, and net accounting gains of about $0.29 per share associated with the sale of Target's entire consumer credit card receivables portfolio to TD Bank Group.
TGT closed Tuesday's trading at $71.26. In Wednesday's pre-market, the stock is down $1.51 or 2.12 percent to $69.75.
For comments and feedback contact: editorial@rttnews.com
Business News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.