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Target Corp retail segment grow in Q1
20 May '08
3 min read
Retail Segment Results:
Sales grew 5.0 percent in the first quarter to $14.3 billion in 2008 from $13.6 billion in 2007, due to the contribution from new store expansion partially offset by a 0.7 percent decline in comparable store sales. Retail segment earnings before interest expense and income taxes (EBIT) were $959 million in the first quarter of 2008, down 2.2 percent from $980 million in 2007.
First quarter gross margin rate declined slightly from last year, driven by faster sales growth in lower margin rate categories, substantially offset by increased margin rates within categories.
First quarter selling, general and administrative (SG&A) expense rate grew modestly from 2007, benefiting from well-controlled dollar growth offset by the de-leveraging effect of slower-than-expected sales growth. As a reminder, for all periods presented, reported gross margin and SG&A expense rates reflect the reclassification of distribution and other supply chain costs from SG&A expense into cost of sales.
Credit Card Segment Results:
Average credit card receivables in the quarter grew $1.9 billion, or 28.3 percent, from the first quarter of 2007, although quarter-end receivables declined $204 million, or 2.4 percent, from year-end 2007.
The dollar spread to one-month LIBOR earned on the portfolio during the quarter increased 3.9 percent to $138 million from $132 million in 2007. As expected, the benefit of sharply higher receivables balances was substantially offset by a decline in the annualized yield spread to LIBOR, which fell from 8.1 percentage points last year to 6.5 percentage points in 2008.
Also, as expected, net write-offs increased in the quarter to an annualized rate of 7.6 percent from 6.0 percent in the first quarter of 2007.
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Sales grew 5.0 percent in the first quarter to $14.3 billion in 2008 from $13.6 billion in 2007, due to the contribution from new store expansion partially offset by a 0.7 percent decline in comparable store sales. Retail segment earnings before interest expense and income taxes (EBIT) were $959 million in the first quarter of 2008, down 2.2 percent from $980 million in 2007.
First quarter gross margin rate declined slightly from last year, driven by faster sales growth in lower margin rate categories, substantially offset by increased margin rates within categories.
First quarter selling, general and administrative (SG&A) expense rate grew modestly from 2007, benefiting from well-controlled dollar growth offset by the de-leveraging effect of slower-than-expected sales growth. As a reminder, for all periods presented, reported gross margin and SG&A expense rates reflect the reclassification of distribution and other supply chain costs from SG&A expense into cost of sales.
Credit Card Segment Results:
Average credit card receivables in the quarter grew $1.9 billion, or 28.3 percent, from the first quarter of 2007, although quarter-end receivables declined $204 million, or 2.4 percent, from year-end 2007.
The dollar spread to one-month LIBOR earned on the portfolio during the quarter increased 3.9 percent to $138 million from $132 million in 2007. As expected, the benefit of sharply higher receivables balances was substantially offset by a decline in the annualized yield spread to LIBOR, which fell from 8.1 percentage points last year to 6.5 percentage points in 2008.
Also, as expected, net write-offs increased in the quarter to an annualized rate of 7.6 percent from 6.0 percent in the first quarter of 2007.
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