Target reports Q4 profit drop of 5.2%, raises full year outlook
Minneapolis — Target Corp. reported Thursday that profit for the quarter ended Jan. 28 slid 5.2% to $981 million amid heavy holiday promotional activity. But the chain is still forecasting a full-year profit outlook that beats analysts’ expectations.
Revenue for the fourth quarter increased 3.3% to $20.94 billion, missing Wall Street’s expected $21.23 billion in revenue. Same-store sales rose 2.2%, below Target expectations.
On a conference call with analysts, Target CEO Gregg W. Steinhafel said that the pace of sales after the holiday period has returned to stronger, pre-holiday levels, and sales momentum has built, particularly in discretionary categories.
The chief executive told analysts Target expects to complete some 230 remodel projects in 2012 as it continues to add perishable food along with a deeper assortment of dry, dairy and frozen items and enhanced store layout and presentation in areas including apparel, home, beauty, shoes and baby.
In addition, the chain will open 20 to 25 stores in 2012, adding 15 to 20 locations, net of relocations and closures. The total includes five stores under the chain’s new urban banner, CityTarget, which will debut in July.
“While these slightly smaller urban stores will incorporate the Target brand and store experience, we’ll tailor our assortment to meet the needs of the trade area and adapt our operating routines to work in smaller spaces with higher traffic,” Steinhafel said on the call.
Looking further ahead, Steinhafel said the chain will take time to learn from the initial CityTarget locations before it determines the appropriate pace of investment and number of additional CityTarget stores it will open.
“In addition, we’ll apply what we learn in these pilot stores across the chain in our larger U.S. stores and in Canada,” he said.
Target remains on track with strategies to ramp up traffic and sales, including teaming with specialty shops to offer limited-edition merchandise and partnering with Apple to test displays of its products in 25 Target stores.
For the full year, we grew our comparable store sales by 3%, our best annual performance since 2007. This growth reflects investments made in our remodel program and the 5% Rewards loyalty program, both of which continue to drive incremental traffic and sales.
Kohl’s Q4 profit falls 7.9% on sales decline
Menomonee Falls, Wis. — Kohl’s Corp. reported Thursday that profit for the fourth quarter dropped 7.9% to $455 million, from $494 million a year earlier, as the retailer experienced unexpected revenue declines during the holiday selling period.
Kohl’s reported that total sales dipped 0.3% to $6.02 billion in the period, and same-store sales dropped 2.1%. It was the chain’s first revenue decline in three years
Yet, said chairman and CEO Kevin Mansell on Thursday, the company was “able to navigate a difficult holiday sales season through strong expense and inventory management."
For the year, Kohl’s reported net sales were $18.8 billion, an increase of 2.2%. Same-store sales increased 0.5%.
“With the commitment of each of our 140,000 associates, we were able to navigate a difficult holiday sales season through strong expense and inventory management,” Mansell said in a statement. “We achieved a major milestone in 2011 with our e-commerce business reporting $1 billion in revenues.”
One bad quarter won’t hurt Kohl’s
MENOMONEE FALLS, Wis. — While Kohl’s may have reported decreases in both sales and net income for its fourth quarter, fiscal 2011 proved to be another profitable year for the retailer.
The company reported fourth quarter diluted earnings per share increased 9% to $1.81. However, net income for the quarter decreased 8% to $455 million, compared with $494 million ($1.66 per diluted share) a year ago. Net sales for the quarter fell 0.3% to $6 billion, while comparable-store sales decreased 2.1%.
Despite a lackluster fourth quarter, Kohl’s ended fiscal 2011 with adiluted earnings per share increase of 17% to $4.30 and net income growth of 4% to $1.17 billion. Net sales were $18.8 billion, an increase of 2.2%. Comparable-store sales increased 0.5%.
Kevin Mansell, Kohl’s chairman, president and chief executive officer, said, “I am pleased that 2011 was another year of profitability and earnings per share growth for our shareholders. With the commitment of each of our 140,000 associates, we were able to navigate a difficult holiday sales season through strong expense and inventory management. We achieved a major milestone in 2011 with our e-commerce business reporting $1 billion in revenues. We are starting 2012 with considerable brand excitement, with the launch of Rock and Republic, continued excitement from our Jennifer Lopez and Marc Anthony brands, and expansion of the successful ELLE and Simply Vera Vera Wang brands into new categories.”
Kohl’s opened 40 stores during 2011 and now has 1,127 stores in 49 states, compared with 1,089 stores at the same time last year. The company remodeled 100 stores in 2011.
Based on assumptions of a total sales increase of 4.5% and a comparable store sales increase of 2%, Kohl’s said it expects earnings per diluted share of $4.75 for the year. For the first fiscal quarter, the company said it expects earnings per diluted share of 60 cents based on assumptions of a total sales increase of 3% and a comparable-store sales increase of 1%.