Target Posts Upbeat Q2 Earnings, Lifts 2015 Forecast

Target Corporation TGT reported stronger-than-expected earnings for the second quarter and raised its profit forecast for the year. The Minneapolis, Minnesota-based company reported quarterly net earnings of $753 million, or $1.18 per share, compared to $234 million, or $0.37 per share, in the year-ago period. Excluding one-time items, the company's earnings climbed 20.6 percent to $1.22 per share. Its total sales climbed 2.8 percent to $17.4 billion. However, analysts were expecting earnings of $1.11 per share on revenue of $17.4 billion. The average estimate among 34 Estimize users was for earnings of $1.12 per share and revenue of $17.42 billion. In the latest quarter, same-store sales gained 2.4 percent. Digital sales surged 30 percent during the quarter. Second quarter EBITDA margin rate expanded to 10.9 percent from 9.9 percent, while gross margin rate rose to 30.9 percent from 30.4 percent. During the second quarter, Target repurchased 8.2 million shares of common stock at an average price of $81.94. "We're very pleased with our second quarter financial results, as traffic growth, strong sales in our signature categories and continued expense discipline drove better-than-expected profitability," said Brian Cornell, chairman and CEO of Target. "While the momentum in our financial results is encouraging, we have much more to accomplish." Target now expects FY15 adjusted earnings of $4.60 to $4.75 per share, versus its earlier forecast of $4.50 to $4.65 per share. For the current quarter, the company projects earnings of $0.79 to $0.89 per share, versus analysts' estimates of $0.86 per share. Target shares climbed 4.48 percent to $83.90 in pre-market trading.