Retailer Target Corp. (TGT) Tuesday said it expects second quarter adjusted earnings per share to be within a range around $0.78, compared with prior guidance of $0.85 to $1.00 per share.
This reflects essentially flat comparable sales with lower-than-expected EBITDA margin in the U.S. segment, driven by promotional markdowns, as guests continue to spend cautiously and focus on value in the current environment.
The revision also reflects in the Canadian Segment somewhat softer-than-expected sales combined with the impact of continued investments to clear excess inventory.
Second quarter reported earnings per share is expected to be approximately 41 cents lower than adjusted earnings per share.
On average, 25 analysts polled by Thomson Reuters expect earnings of $0.91 per share for the quarter. Analysts' estimates typically exclude special items.
The firm said its second quarter results are expected to include gross expenses of $148 million, partially offset by a $38 million insurance receivable, related to the December 2013 data breach.
These expenses include an increase to the accrual for estimated probable losses for what the company believes to be the vast majority of actual and potential breach-related claims, including claims by payment card networks.
John Mulligan, Interim President and CEO, CFO of Target, said, "While the environment in both the U.S. and Canada continues to be challenging, and results aren't yet where they need to be, we are making progress in our efforts to drive U.S. traffic and sales, improve our Canadian operations and advance Target's digital transformation."
TGT, which closed at $60.70 on Monday, is down 3.2 percent in pre-market activity.
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