Target Corp. has announced third quarter net earnings of $341 million, or 54 cents per diluted share, versus $637 million, or 96 cents per diluted share, in the year-earlier period, with the 2013 figure including EPS dilution of 29 cents per share related to the company’s new Canadian operation. Target asserted that adjusted earnings per share were 84 cents compared with 90 cents in the 2012 quarter.
Standard & Poors downgraded Target stock to hold from buy based on its third quarter financial results, noting that earnings per share came in eight cents below expectation and that clearance activity was more intense than expected.
Overall sales were $17.26 billion, up from $16.6 billion in last year’s quarter. At stores in the United States, third quarter sales increased 2% to $16.9 billion based on a 0.9% increase in comparable store sales combined with the contribution from new stores.
Target experienced a decline in average transaction in the third quarter offset by increase in average ticket, said chairman, president and CEO Gregg Steinhafel, in a conference call,
Steinhafel added that Halloween sales were lower than expected as the government shutdown and continued sluggish economy hurt consumer confidence and made Target shoppers wary about spending.
Home suffered a slight comp decline in the quarter, said Kathryn Tesija, executive vp/merchandising and supply chain, in the conference call. Domestic sales were strongest among segments in the category.
Steinhafel noted, however, that home categories had performed well in Canada.
For the holidays, Tesija said, Target will introduce exclusive Nate Berkus holiday collections in bedding, gift and décor. She said the company would feature “high-end” kitchen products from Vitamix and Nespresso.
“Target’s third quarter financial results reflect continued strong execution in our U.S. Segment in an environment where consumer spending remains constrained,” Steinhafel said in comments on the third quarter financials announcement. “As our focus shifts to the fourth quarter, we are intently focused on delivering outstanding merchandise, an easy, fun shopping experience and an unbeatable combination of everyday low prices, weekly ad discounts, 5% REDcard Rewards and price match policies throughout the U.S. and Canada. And, in our Canadian Segment, we are also focused on improving performance as we transition from opening to operating our 124 stores.”