Target Corp. on Tuesday delivered fourth-quarter earnings that jumped 19.2 percent on a revenues gain of 16.3 percent — ahead of Wall Street estimates.
Net income for the period ended Feb. 3 leapt to $1.12 billion, or $1.29 a diluted share, from $939 million, or $1.06, in the year-ago quarter. The results beat Wall Street's consensus estimates by 2 cents. Revenues rose to $19.71 billion from $16.95 billion, which included a 16 percent jump in sales to $19.27 billion from $16.57 billion. Same-store sales in the quarter rose 4.8 percent.
For the year, net income climbed 15.7 percent to $2.79 billion, or $3.21 a diluted share, from $2.41 billion, or $2.71, in the same year-ago period. Revenues rose 13.1 percent to $59.49 billion from $52.62 billion, which included a sales gain of 12.9 percent to $57.88 billion from $51.27 billion.
"As expected, we enjoyed strong sales growth during the final three months of the year, and we were able to translate that top-line strength into a meaningful increase in our profitability. The peak sales period between Thanksgiving and the end of December was intensely competitive, especially in apparel, as we expected it would be. But by remaining focused on our strategy, we delivered a holiday marketing campaign that highlighted Target's distinctive attributes and reinforced our 'Expect More, Pay Less' brand promise….We enjoyed double-digit increases in gift card issuance and redemptions and we continue to delight our guest by offering the right combination of everyday essentials and differentiated design to compelling values," said Robert Ulrich, chairman and chief executive officer, during a conference call to Wall Street analysts.
Greg Steinhafel, president, told analysts that the company will add 120 new stores, or 100 net new stores, this year. All stores remain committed to the "Expect More, Pay Less" brand promise, such as the launch earlier this month of Proenza Schouler, a "limited-engagement line" of trend-right assortments through April. Also on tap are the launches of new fragrance lines and the addition of more natural products such as Burt's Bees in bath and body, Steinhafel said.
The company said during the call that Wall Street's 2007 consensus of $3.60 in earnings per share is within the range of its expectations.
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