Adjusted EPS grows 14.9% at retailer Target in Q4

02 Mar '15

3 min read

In the fourth quarter of 2014, adjusted earnings per share at retailer Target Corporation grew 14.9 per cent from the same quarter of 2013.

Adjusted earnings per share rose to $1.50, up 14.9 per cent from $1.31 in 2013, while full-year adjusted earnings per share was $4.27, down 2.6 per cent from $4.38 last year.

GAAP earnings per share from continuing operations were $1.49 in fourth quarter of 2014 and $3.83 in full-year 2014, compared with $1.22 and $4.20 in 2013, respectively.

In fourth quarter, Target said it recognised a pre-tax loss of $5.1 billion related to its discontinued Canadian operations, resulting in a loss per share of $5.59.

Fourth quarter 2014 sales climbed 4.1 per cent to $21.8 billion from $20.9 billion last year, reflecting a 3.8 per cent hike comparable sales combined with sales from new stores.

Segment earnings before interest expense and income taxes (EBIT) stood at $1,603 million in the fourth quarter of 2014, an expansion of 13.4 per cent from $1,413 million in 2013.

Fourth quarter of 2014 EBITDA and EBIT margin rates were 9.9 per cent and 7.4 per cent, respectively, compared with 9.2 per cent and 6.8 per cent in 2013.

The gross margin rate in the reporting quarter reached 28.5 percent as against 27.6 per cent in 2013, reflecting the benefit of annualising clearance markdowns and favourable merchandise mix.

Full-year 2014 sales rose 1.9 per cent to $72.6 billion from $71.3 billion last year, reflecting a 1.3 per cent increase in comparable sales combined with sales from new stores.

Full-year EBIT totaled to $4,761 million in 2014, down 4.0 per cent from $4,959 million last year.

While, 2014 EBITDA and EBIT margin rates were 9.5 per cent and 6.6 per cent, respectively, compared with 9.8 per cent and 7.0 per cent in 2013.

Full-year gross margin rate was 29.4 per cent as against 29.8 per cent in 2013, driven by increased promotional activity in the first three quarters of 2014.

Full-year SG&A expense rate was down to 19.9 per cent in 2014 compared with 20.0 per cent in 2013 from disciplined expense control across the organisation.

Target’s fourth quarter 2014 net interest expense was $151 million, up from $142 million last year, while full-year net interest expense was $882 million in 2014, down from $1,049 million in 2013.

Excluding losses of $285 million and $445 million related to the early retirement of debt in 2014 and 2013, respectively, full-year 2014 net interest expense was approximately flat to last year.

The Company’s fourth quarter effective income tax rate from continuing operations was 33.0 per cent in 2014 and 33.5 per cent last year.

Target’s full-year 2014 effective income tax rate from continuing operations decreased 1.6 percentage points to 33.0 per cent from 34.6 per cent in 2013.

The lower full year 2014 tax was driven primarily by the net tax effect of the company’s global sourcing operations and the favourable resolution of various income tax matters. (AR)

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