Target Q2 earnings decline 11.6 percent, lowers outlook

Target Corporation reported comparable sales decrease of 1.1 percent and GAAP earnings per share (EPS) from continuing operations of 1.07 dollars, a decrease of 11.6 percent for the second quarter 2016. Adjusted EPS, which excludes 161 million dollars of pre-tax early debt retirement losses, were 1.23 dollars, an increase of 0.5 percent from second quarter 2015.

“While we recognize there are opportunities in the business, and are addressing the challenges we are facing in a difficult retail environment,” said Brian Cornell, Chairman and CEO of Target. “Although we are planning for a challenging environment in the back half of the year, we believe we have the right strategy to restore traffic and sales growth over time.”

Third quarter and fiscal 2016 guidance

Based on the current retail environment the company has lowered its expectations for comparable sales in the second half of the year. In both the third and fourth quarters of 2016, Target now expects comparable sales growth in the range of 2 percent to flat. In third quarter, Target expects both GAAP EPS from continuing operations and Adjusted EPS of 0.75 dollar to 0.95 dollar.

For full-year 2016, Target now expects GAAP EPS from continuing operations of 4.36 dollars to 4.76 dollars, compared with prior guidance of 4.76 dollars to 4.96 dollars. Adjusted EPS is expected to be in the range of 4.80 dollars to 5.20 dollars, compared with prior guidance of 5.20 dollars to 5.40 dollars. The 44-cent difference between the guidance ranges for GAAP EPS from continuing operations and Adjusted EPS primarily reflects early debt retirement losses already reported in 2016.

Picture:Target