Target Says Au Revoir To Its Canadian Operations, Plans To Fully Exit Canada
Target Corporation (NYSE: TGT) on Thursday made the difficult decision to fully exit its Canadian operations after less than two years in operations.
The company has already filed an application for protection under the Companies Creditors Arrangement Act with the Ontario Superior Court of Justice in Toronto, Ontario. As a result of the filing, Target expects to report approximately $5.4 billion of pre-tax losses on discontinued operations during the fourth quarter 2014.
Target expects to report approximately $275 million of pre-tax losses on discontinued operations in fiscal 2015.
Shares were up more than 3 percent in the premarket.
“After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021,” Brian Cornell, Target's Chairman and CEO said in a press release. “Personally, this was a very difficult decision, but it was the right decision for our company.”
Target operates 133 stores across Canada, employing 17,600 people. Target is seeking court approval to voluntarily make cash contribution of $59 million into an Employee trust that would provide nearly all employees a minimum of 16 weeks of compensation.
Fourth Quarter Guidance
Target stated that it expects to report fourth quarter 2014 U.S. comparable sales of approximately 3 percent, higher than prior guidance of approximately 2 percent. The company expects to report fourth quarter adjusted earnings per share, reflecting results from continued operations, of $1.43 to $1.47.
The company is unable to provide at this time fourth quarter 2014 GAAP earnings per share.
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