FINANCE

Target Q2 profit drops 61.7%; cuts full-year forecast

BY Marianne Wilson

Minneapolis — Target Corp. on Wednesday reported a 61.7% drop in Q2 earnings. The chain also lowered slashed its annual profit outlook as it continues to deal with weak results in Canada, sluggish U.S. sales and the lingering effects of its data breach.

Target earned $234 million in the quarter ended Aug. 2, down from $611 million in the year-ago period.

Revenue rose 1.7% to $17.4 billion, slightly above the $17.38 billion analysts had expected.

Same-store sales were flat in the United States, but down 11% in Canada, which the chain attributed to “grand opening” sales surges of its Canadian locations that inflated 2013′s results. Target noted it is making “important changes to operations and the merchandise assortment” in Canada, with a focus on delivering improved results by this holiday season.” Last week, the retailer outlined key initiatives, including a price-matching program and a merchandising partnership with celebrity designer Sarah Richardson. Operating profits in Canada declined 20.8% to a $208 million second quarter loss, compared to a $169 million loss the prior year.

There were some positive signs in the chain’s results. Target’s digital sales, including flexible fulfillment, grew more than 30% in the quarter, approximately double the industry growth rate. The company also said customer traffic is “slowly recovering” with July same-store sales up more than 1%.

“While results from the quarter didn’t meet our expectations, we are seeing some early signs of progress as we work to improve results in the U.S. and Canada,” John Mulligan, Target’s executive VP and CFO, said in a statement. He went on to add that “better U.S. sales have continued into August, driven by early back-to-school results.”

Looking ahead, Target said it expects 40 to 50 cents per share in third quarter earnings — not including any future data breach expenses.

On a full-year basis, Target predicts that it will record $3.10 to $3.30 in adjusted earnings per share, a lower range than its prior $3.60 to $3.90 per-share guidance.

In August, Target named PepsiCo executive Brian Cornell as its new CEO.

“In the coming weeks and months I will be focused on listening and learning from Target team members in the U.S. and Canada, and working with the leadership team to develop guest-focused, strategic plans to position Target for long-run success,” Cornell said in a statement.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...
OPERATIONS

Gordmans names former Stage Stores chief exec as CEO

BY Marianne Wilson

Omaha, Neb. — Gordmans Stores has named Andrew T. Hall president and CEO, effective Aug. 19. He also was appointed to the company’s board of directors.

Hall, 53, was president and chief executive officer of Stage Stores, from 2008 to 2012 and served as its president and COO from 2006 to 2008. At Gordmans, he succeeds T. Scott King, Gordmans’ chairman of the board, who has been serving as interim president and CEO since March 2014.

"Andy brings deep knowledge and expertise in the department store and everyday low price categories. He has a strong operational and financial background with a proven record of leading high-caliber teams. He is uniquely qualified to lead Gordmans’ strategic omnichannel expansion," said King.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...
News

Lowe’s recovers from weather-related woes in Q2

BY CSA STAFF

A day after Home Depot reported strong second-quarter results, it was Lowe’s turn to deliver strong quarterly earnings.

And the Mooresville, North Carolina-based retail giant did just that. The company reported net earnings of $1.04 billion for the quarter ended Aug. 1, marking a 10.4% increase over the second quarter last year. Sales for the quarter were up 5.7% to $16.6 billion, as comparable-store sales were up 4.4%.

"We were able to recover most of the outdoor product sales missed in the first quarter due to unfavorable weather conditions," said Robert Niblock, president and CEO.

For Lowe’s, the expectation is that home improvement spending will continue to grow in concert with job and income growth. The company’s forecast for earnings per share remains unchanged, but Lowe’s made a "modest reduction" to its sales outlook for the year, based partly on year-to-date performance. For the year, total sales are expected to increase about 4.5%, as comps are expected to increase about 3.5%

The company operated 1,837 home improvement and hardware stores as of Aug. 1, representing 200.8 million square feet of retail space.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

Polls

Consumer confidence is high. Is that reflected in your stores’ revenues?

View Results

Loading ... Loading ...