Earnings Scorecard: Target

Target Corporation (TGT), the operator of general merchandise and food discount stores in the United States, posted its second-quarter 2012 results on August 15. Here we will discuss the companys scorecard, based on the recent earnings announcement, subsequent estimate revisions by analysts as well as the Zacks Rank and long-term recommendation for the stock.

Last Quarter Synopsis

Minneapolis, Minnesota-based company, Target, posted better-than-expected second quarter results on the backs of healthy sales. Lower shares outstanding also provided cushion to the bottom line.

The company delivered quarterly earnings of $1.06 per share that rose 3.4% from $1.03 earned in the prior-year quarter, and also came ahead of the Zacks Consensus Estimate of $1.01. However, excluding costs related to Canadian operations, earnings from its U.S. operations came in at $1.12 per share, up 4.6% from $1.07 posted in the year-ago quarter. The quarterly earnings fit in with the companys previous projection of $1.04 to $1.14 per share.

Total revenue climbed 3.3% to $16,779 million from the prior-year quarter, and beat the Zacks

Consensus Estimate of $16,769 million. Retail sales grew 3.5% to $16,451 million as shoppers are gradually opening up their wallets but still remain wary. The company indicated that revenue from the Credit Card segment tumbled 5.1% to $328 million.

Target said that comparable-store sales for the quarter rose 3.1% compared with a 3.9% increase registered in the prior-year quarter.

Guidance

Target now projects adjusted third-quarter 2012 earnings between 83 cents and 93 cents a share. For fiscal 2012, earnings are expected to be in the range of $4.65 to $4.85 per share, up from $4.60 to $4.80 forecasted earlier.

On a GAAP basis, including expenses related to the companys entry in the Canadian market, management projected earnings between 69 cents and 79 cents for the third quarter and between $4.20 and $4.40 per share for fiscal 2012, up from $4.10 and $4.30 projected previously.

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Earnings Scorecard: Target