Target Corporation (NYSE:TGT) Steers Through The Harsh Quarter Decently

by Sean Patterson | Thursday, Feb 27, 2014 | 4128 views

Boston, MA, 02/27/2014 – Target Corporation (NYSE:TGT) has passed the test in its fourth quarter as the retailer posts the results better-than-expected. It has to be noted that analysts have been following Target Corporation closely after the retailer had to cough out over $1 billion to settle claims against the stolen data during the Christmas.

Fourth Quarter Review

In Spite of higher data breach costs, Target Corporation (NYSE:TGT) was able to achieve earnings per share of $1.30 this time as against the market consensus of $0.82. The retailer’s revenue came in at $21.52 billion, higher than the analyst estimate by $60 million. The positive reported quarter drove the stock prices of the company higher by more than 7%.

Target Corporation (NYSE:TGT) noted that the better profits in the quarter are accredited to the inventory and expense management, which helped it to cope up with the rough store traffic in both Canada and the U.S. The company reported decline in U.S. comparable-store sales by 2.5% in the said quarter. Target’s profits took a backseat as it was charged with the data breach costs. According to the details furnished, Insurance settled $44 million out of the claimed $61 million and if experts are to be believed than more costs are expected to fall in Target’s share.

Guidance And Costs

Target Corporation (NYSE:TGT)’s growth objective in Canada did not seem to come on the lines as the costs ran upward, while sales trailed the estimates.However, the year 2014 will mark as the first full year consisting Canada sales and so the company has included its numbers in the upcoming guidance. For the first quarter, Target has an EPS projection of $0.60-$0.75 per share, while for the full year 2014, it anticipates the adjusted EPS to fall in the range of $3.85 to $4.15. Target Corporation (NYSE:TGT) has accepted during the call that its current as well as future earnings will stay largely impacted by the costs related to data breach, as the future expenses remain uncertain.

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