Target warns Q1 profit will fall short of forecast
Minneapolis — Target Corp. said Tuesday it will miss its first-quarter profit outlook as seasonal and weather-sensitive items underperformed.
The retailer also said it now expects same-store sales to be flat in the quarter.
Target’s quarterly results are slated to be reported on May 22.
Ikea’s U.S. solar presence brightens
PERRYVILLE, Md. — Ikea has plugged-in the solar energy system installed at its distribution center in Perryville, Md.
The 768,972-sq.-ft. PV array consists of a 2,674.9-kW system, built with 18,576 panels, and is the state’s largest rooftop array. The Ikea distribution center will produce approximately 3,397,178 kWh of clean electricity annually, the equivalent of reducing 2,397 tons of carbon dioxide, eliminating the emissions of 499 cars or powering 359 homes yearly (calculating clean energy equivalents at www.epa.gov/cleanenergy/energy-resources/calculator.html).
This installation represents the furniture retailer’s 36th completed solar project in the United States, with three more locations underway, making the eventual U.S. solar presence of Ikea nearly 90% of its U.S. locations with a total generation of 38 MW. Ikea owns and operates each of its solar PV energy systems atop its buildings — as opposed to a solar lease or power purchase agreement — and globally has allocated $1.8 billion to invest in renewable energy through 2015. This investment reinforces the long-term commitment of Ikea to sustainability and confidence in photovoltaic technology. Consistent with the company’s goal of being energy independent by 2020, Ikea has installed more than 250,000 solar panels on buildings across the world and owns/operates approximately 110 wind turbines in Europe.
For the development, design and installation of the Perryville distribution center’s customized solar power system, Ikea contracted with Inovateus Solar LLC, an industry-leading solar power distributor and integrator specializing in large-scale solar installations.
“As one of the largest rooftop arrays in the country, this installation will ensure that the Ikea Perryville distribution center consumes very little power from the electric grid,” said Ed Morris, Perryville distribution center manager. “Ikea is thrilled at this opportunity to further our investment in this community while also continuing our commitment of incorporating sustainability into our supply chain operations. We appreciate the continued support of the City of Perryville, Cecil County, Delmarva Power and Inovateus Solar, our partners in this project.”
Ikea, drawing from its Swedish heritage and respect of nature, believes it can be a good business while doing good business and aims to minimize impacts on the environment. Globally, Ikea evaluates locations regularly for conservation opportunities, integrates innovative materials into product design, works to maintain sustainable resources and flat-packs goods for efficient distribution. Specific U.S. sustainable efforts include recycling waste material; incorporating environmental measures into the actual buildings with energy-efficient HVAC and lighting systems, recycled construction materials, skylights in warehouse areas and water-conserving restrooms; and operationally, eliminating plastic bags from the check-out process, phasing-out the sale of incandescent light bulbs and facilitating recycling of customers’ compact fluorescent bulbs. Ikea has installed electric vehicle charging stations at nine stores in the Western U.S., and by 2016 will go L.E.D. by selling and using lightbulbs that are only L.E.D.
Constructed on 278 acres in the community of Perryville, in Northern Md.’s Cecil County, this 1.7 million-sq.-ft. Ikea distribution center began operations in 2002, employs approximately 550 coworkers and currently helps provide inventory to many U.S. Ikea stores.
Founded in 1943 in Sweden, Ikea currently operates more than 330 stores in 40 countries, including 38 in the United States, as well as six distribution centers in North America. Ikea incorporates sustainability into day-to-day business and supports initiatives benefiting children and the environment.
Target lowers Q1 sales and profit forecast
Softer than expected sales trends prompted Target to lower its first quarter earnings outlook Tuesday morning.
The company said it now expects first quarter comps to be flat, after previously forecasting a range of flat to 2% growth. The softer than expected sales prompted the company to revise first quarter adjusted profit expectations to an unspecified level of "slightly below" earlier guidance of $1.10 to $1.20.
The reduced guidance was offered as part of a financial update connected to the company’s recent settlement of a debt tender offer and credit card portfolio sale. According to the company, factors contributing to the reduction included losses related to the early retirement of debt of approximately $445 million, or 41 cents per share and expected earnings per share dilution of 23 cents related to the company’s Canadian segment somewhat offset by accounting gains of approximately 36 cents associated with the sale of Target’s entire consumer credit card receivables portfolio to TD Bank Group.
The sales weakness was characterized as softer than expected, but Target chairman, president and CEO Gregg Steinhafel did offer a heavy dose of pessimism when sharing his first quarter outlook back in February when fourth quarter results were reported.
"As we enter 2013, we will plan appropriately, as the U.S. economy is growing at a painfully slow rate and unemployment remains persistently high," Steinhafel said during the company’s fourth quarter conference call. "While there are some encouraging signs in the housing market, volatility in consumer confidence, the payroll tax increase, and rise in the price of gas all present incremental headwinds. Given these new challenges facing an already sluggish economy, we have a tempered view of the near-term sales environment."
Despite the first quarter weakness, Target maintained its full year profit forecast which calls for adjusted earnings per share in the range of $4.85 to $5.05.
Target currently operates 1,784 in the United States and 24 units in Canada.