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Target Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 26, 2011 03:19PM
Target Corp. (TGT) filed Quarterly Report for the period ended 2011-04-30. Target Corp. has a market cap of $35.47 billion; its shares were traded at around $49.36 with a P/E ratio of 12.7 and P/S ratio of 0.5. The dividend yield of Target Corp. stocks is 1.9%. Target Corp. had an annual average earning growth of 9.2% over the past 10 years. GuruFocus rated Target Corp. the business predictability rank of 5-star.
Highlight of Business Operations:
Consolidated revenues were $15,935 million for the three months ended April 30, 2011, an increase of $342 million or 2.2 percent from the same period in the prior year. Consolidated earnings before interest expense and income taxes for first quarter 2011 increased by $22 million or 1.8 percent over first quarter 2010 to $1,264 million. Cash flow provided by operations was $1,052 million and $1,158 million for the three months ended April 30, 2011 and May 1, 2010, respectively. We opened 6 new stores in the first quarter of 2011 (5 net of 1 relocation). During the three months ended May 1, 2010, we did not open any new stores or close any existing stores.
In January 2011, we entered into an agreement to purchase the leasehold interests in up to 220 sites in Canada currently operated by Zellers Inc. (Zellers), in exchange for C$1,825 million (Canadian dollars), due in two equal installments, one on May 27, 2011 and one in the third quarter of this year. We believe this transaction will allow us to open 100 to 150 Target stores in Canada, primarily during 2013. We are still in the process of evaluating each location currently leased by Zellers. We have selected 105 locations and expect to finalize the acquisition of these sites by early June 2011. We have the right to select up to 115 additional leases in advance of the second payment in third quarter 2011. During the three months ended April 30, 2011, start-up costs totaled $11 million and primarily consisted of legal, payroll, and consulting expenses. These expenses are reported in SG&A expense within the consolidated statement of operations.
(a) Loyalty Program discounts are recorded as reductions to sales in our U.S. Retail Segment. Effective with the October 2010 nationwide launch of our new 5% REDcard Rewards loyalty program, we changed the formula under which our U.S. Credit Card segment reimburses our U.S. Retail Segment to better align with the attributes of the new program. In the three months ended April 30, 2011, these reimbursed amounts were $49 million compared with $17 million in the corresponding period in 2010. In all periods these amounts were recorded as reductions to SG&A expenses within the U.S. Retail Segment and increases to operations and marketing expenses within the U.S. Credit Card Segment.
Stocks Discussed: TGT,