(By David) Target (NYSE:TGT) is scheduled to release its 4
th quarter earnings on February 23
rd 2010. The trailing-twelve-month return on equity for Target Corp stands at 15.14, which is in the top 5 US retail companies. Target is the second largest US discount retail company, with 33% of its sales coming from consumables, 22% from electronics, 21% from home furnishings, 20% from clothing and 4% from credit card operations.
Target Corporation operates general merchandise and food discount stores in the United States. The company offers an assortment of general merchandise, including consumables and commodities; electronics, entertainment, sporting goods, and toys; apparel and accessories; and home furnishings and decor, as well as a line of food items primarily under the Target and Super Target brands. It also sells its merchandise under private-label. The company markets its products through its network of distribution centers, as well as through its online shopping site, Target.com. As of January 31, 2009, it operated 1,682 stores and 34 distribution centers. Target Corporation also provides credit to qualified guests through its branded proprietary credit cards, including the Target Visa and the Target Card. The company was founded in 1902 and is headquartered in Minneapolis, Minnesota.
Target reported 3rd quarter net income of 58 cents per diluted share. Net income was up 18% year over year, and earnings beat the average analyst estimate of 50 cents per share. Total revenue for the 3rd quarter was up 1.1% to 15.3 billion, which met analyst estimates. The companies operating margin was up 5.72% in the 3rd quarter about 11 basis points lower than expected and 2 basis points lower on a year over year basis.
EPS estimates for the full year of 2010 are stable at 3.13 per share. For the 4th quarter of 2009, the average analyst estimate is for earnings of 1.16 per share on 20.12 billion dollars of revenue. Management of Target has stated that earning of 1.12 per share is within the range of likely outcomes. Over the past 90 days, the mean estimate for earnings has remained unchanged at 1.16 per share. The company is likely to add 60 stores in 2010 compared to 91 in 2009. TGT has made an adjustment to store sizes in an effort to cut costs. Analysts expect Target's smaller stores to be 60,000 to 100,000 square feet. Target is already testing a new "assortment approach" in three stores, where it is offering 50 percent fewer items to see how customers react. The company reported that its net retail sales for the four weeks ended January 30, 2010 were $4,289 million, an increase of 3.6 percent from $4,138 million for the four weeks ended January 31, 2009. Adjusted January sales at stores open at least one year rose 0.5%. Analysts, on average, had expected same-store sales to rise 1.4%.
Target's 52 week trading range is 25 – 52.46 and is currently trading at 48.95. The price of TGT has increased 63% during the course of the past 12 months. During the recent market correction, TGT has remained firm, with a very small correction from a recent 52 week high. TGT's 3 year EPS growth rate is -5%, its 3 year sales growth rate is 4%, its debt to equity is 128% and its PE ratio is currently 17%.
