Target to cut prices, launch new private labels to drive sales

Target Corporation reported GAAP EPS from continuing operations of 1.46 dollars in fourth quarter and 4.58 dollars for full-year 2016, compared with 2.31 dollars and 5.25 dollars in 2015, respectively. Fourth quarter adjusted EPS were 1.45 dollars, down 4.6 percent from 1.52 dollars in 2015, while full-year adjusted EPS of 5.01 dollars was 6.7 percent higher than 4.69 dollars in 2015.

“Our fourth quarter results reflect the impact of rapidly-changing consumer behavior, which drove very strong digital growth but unexpected softness in our stores,” said Brian Cornell, Chairman and CEO of Target in a statement, adding, “We will accelerate our investments in a smart network of physical and digital assets as well as our exclusive and differentiated assortment, including the launch of more than 12 new brands, representing more than 10 billion dollars of our sales, over the next two years. While the transition to this new model will present headwinds to our sales and profit performance in the short term, we are confident that these changes will best-position Target for continued success over the long term.”

Guidance reflects drop in Q1 comparable sales

Target said its 2017 guidance reflects the impact of the company’s transition to a new financial model. In first quarter 2017, Target expects a low-to-mid single digit decline in comparable sales, and both GAAP EPS from continuing operations and adjusted EPS of 0.80 dollar to 1 dollar.

For full-year, Target expects a low-single digit decline in comparable sales, and both GAAP EPS from continuing operations and Adjusted EPS of 3.80 dollars to 4.20 dollars.

Picture:Target