Retail giant Target Corp. is toasting a slight increase in first quarter profits after sales outstripped the company’s expectations.
The retailer posted first quarter net earnings of $697 million or $1.04 per share, higher than last year’s $689 million or $0.99 per share.
Adjusted earnings per share rose to $1.11 from $0.99 in the same quarter last year. On average, 22 analysts polled by Thomson Reuters expected the company to report earnings of $1.01 per share. Analysts’ estimates typically exclude special items.
Total revenues grew to $16.87 billion from $15.94 billion in the prior-year quarter. Analysts expected revenues of $16.83 billion.
“We’re very pleased with our first quarter earnings, which benefited from better-than-expected sales,” said Gregg Steinhafel, chairman, president, and chief executive officer of Target Corp. “While our outlook for the remainder of 2012 reflects continued economic uncertainty, we are confident in our strategy, keenly focused on delivering an affordable and inspirational merchandise assortment to our guests and committed to making thoughtful investments in our U.S. and Canadian business segments that we expect will reward our shareholders over time.”
Barclays Capital said of the results: “We are encouraged that Target has regained comp momentum seen prior to the holiday season, and believe the company remains well-positioned with the successful rollout of new merchandising initiatives.”
For the second quarter, the company expects adjusted earnings per share of $1.04 to $1.14 and GAAP earnings per share of $0.94 to $1.04. Analysts expect earnings of $0.99 per share.
For full-year 2012, the company has raised its guidance by 5 cents and now expects adjusted earnings per share of $4.60 to $4.80. Earlier, the company expected 2012 adjusted earnings per share of $4.55 – $4.75 and GAAP earnings per share of $4.05 – $4.25. Analysts expect earnings of $4.28 per share and GAAP earnings per share of $4.10 to $4.30.
Target posted a $55m loss in EBIT terms related to its Canadian activities, including start-up expenses, depreciation and amortisation related to its expected entry to the market in 2013.