Target's comparable holiday sales rise 3.4 percent

Target Corporation’s comparable sales in the combined November/December period grew 3.4 percent, compared with the expected range of 0 to 2 percent. Comparable sales across all of the company’s core merchandise categories – home, apparel, food & beverage, hardlines and essentials, Target said, were positive and accelerated from the third quarter, reflecting strong traffic growth, positive store comps and continued strength in digital sales. Target now expects 2017 will be the fourth consecutive year in which its digital sales grow more than 25 percent.

“We are very pleased with our holiday season performance, which reflects the progress we’ve made against our strategy throughout the year,” said Brian Cornell, Chairman and CEO of Target Corporation in a press release, adding, “As we look ahead to 2018, we will build on the foundation we established this year by launching additional exclusive brands, enhancing our digital capabilities, opening approximately 30 small-format stores and tripling the size of our remodel program to more than 325 stores.”

Target updates fourth quarter and full-year guidance

Target now expects fourth quarter comparable sales growth in a range around 3.4 percent, consistent with results in the November/December period. This, the company added, would translate into full-year 2017 comparable sales growth of just over 1 percent. Sales from new and non-mature stores are expected to contribute approximately 70 basis points to Target’s fourth quarter sales growth. Combined with the impact of a 53rd week in the 2017 fiscal year, Target’s total sales are expected to grow more than 9 percent in the fourth quarter.

For fourth quarter, the company expects adjusted EPS of 1.30 dollars to 1.40 dollars, compared to the prior range of 1.05 dollars to 1.25 dollars. Fourth quarter GAAP EPS from continuing operations is expected to be higher than adjusted EPS, reflecting an expected benefit driven primarily by a one-time change in Target’s net deferred tax liabilities resulting from federal tax reform legislation.

For full-year 2017, the company now expects adjusted EPS of 4.64 dollars to 4.74 dollars, compared with prior guidance of 4.40 dollars to 4.60 dollars. Full-year GAAP EPS from continuing operations is expected to be higher than adjusted EPS, reflecting the previously-noted tax-reform benefit primarily related to Target’s net deferred tax liabilities. In addition, full-year GAAP EPS from continuing operations, Target said, will include a 14-cent loss from the net impact of debt retirement costs; and an 11-cent tax benefit related primarily to the company’s global sourcing operations.

For 2018, Target is currently planning for a low single-digit increase in its comparable sales and year-over-year stability in EPS generated by its core business, excluding the benefit of federal tax reform. Combining expectations for stable core-business profitability with the benefit of federal tax reform, Target expects 2018 GAAP EPS from continuing operations and adjusted EPS of 5.15 dollars to 5.45 dollars.

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