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Q2 adjusted EPS shrinks 20.6% at retailer Target

August 22, 2014 (United States Of America)

US retailer and NYSE-listed Target Corporation posted a decline of 20.6 percent year-on-year in its second quarter of 2014 adjusted earnings per share.

Target’s adjusted earnings per share fell to $0.78 from $0.98 per share in the second quarter of 2013.

In second quarter 2014, US sales increased 0.7 percent to $17.0 billion from $16.8 billion in second quarter last year, which Target said, reflects the contribution from new stores and from flat comparable sales.

Earnings before interest expense and income taxes (EBIT) stood at $1,160 million in second quarter 2014, down 12.8 percent from $1,330 million in comparable quarter of 2013.

Second quarter of 2014, EBITDA and EBIT margins were 10.0 percent and 6.8 percent, respectively, compared with 10.8 percent and 7.9 percent in same quarter of 2013.

Second quarter gross margins declined 100 basis points to 30.4 percent from 31.4 percent in 2013, driven by an increase in promotions.

Second quarter of 2014 SG&A expense rate fell to 20.4 percent compared with 20.6 percent in the quarter of prior year, which Target said, reflects disciplined control of expenses across the organization.

In Canada, second quarter of 2014 sales increased 63.1 percent to $449 million from $275 million last year, mainly from contribution from new stores partially offset by an 11.4 percent decline in comparable sales.

Target informed that second quarter of 2014 is the first period with reported comparable sales for the Canadian Segment, reflecting results in 48 Canadian stores that became mature at various points during the quarter.

The second-quarter decline in comparable sales reflects the comparison to strong grand opening sales surges in 2013, combined with the impact of market densification later in 2013 which redistributed sales from earlier store openings.

Second quarter of 2014 gross margin stood at 18.4 percent, compared with 31.6 percent in second quarter of 2013, from the continued impact of efforts to clear excess inventory.

SG&A expense rate of 48.3 percent in second quarter of 2014 fell from 75.2 percent last year, due to increased scale in the Canadian segment and pre-opening costs in last year’s results.

In second quarter of 2014, Target paid dividends of $272 million, an increase of 18 percent from $231 million last year. In June, it increased the quarterly dividend by 21 percent from 43 cents to 52 cents per share, beginning with dividend payable on September 10, 2014.


Fibre2fashion News Desk - India
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