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Target (TGT) Beats on Q2 Earnings, Cuts View; Stock Down

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Target Corp. (TGT - Free Report) , department store retailer, came out with second-quarter fiscal 2016 results, wherein adjusted earnings from continuing operations came in at $1.23 per share that substantially surpassed the Zacks Consensus Estimate of $1.13 and inched up 0.5% year over year.

Earnings Estimate Revision: The Zacks Consensus Estimate for fiscal 2016 has witnessed downward revisions in the last 30 days. However, in the trailing four quarters, including quarter under review, the company outperformed the Zacks Consensus Estimate by an average of 3.8%.

TARGET CORP Price and EPS Surprise


TARGET CORP Price and EPS Surprise | TARGET CORP Quote

Revenues: Target generated net sales of $16,169 million that decreased 7.2% year over year and also fell short of the Zacks Consensus Estimate of $16,208.3 million. The decline in top-line was attributable to a 1.1% drop in comparable sales, coupled with absence of pharmacy and clinic revenues.

Key Events: Target returned about $1,680 million to its shareholders in the form of share repurchases and dividend payments. The company bought back shares worth $1,350 million and paid dividends of $330 million in the reported quarter.

Outlook: Given the current retail scenario, Target lowered its outlook for fiscal 2016. The company now envisions adjusted earnings in a band of $4.80-$5.20 per share, compared with $5.20 - $5.40 per share expected earlier.

For the third quarter fiscal 2016, the company expects adjusted earnings per share in the range of 75 – 95 cents. Further, management projects comparable sales growth for the third and fourth quarters of fiscal 2016, in a range of negative 2% to flat.

Zacks Rank: Currently, Target carries a Zacks Rank #2 (Buy) which is subject to change following the earnings announcement.

Stock Movement: Target’s shares were down nearly 4.6% during pre-market trading hours following the earnings release.  

Check back later for our full write up on Target’s earnings report!

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