MINNEAPOLIS, Nov. 14 /PRNewswire/ -- Target Corporation (NYSE: TGT) today
reported earnings per share for the third quarter ended October 28, 2000 of
24 cents, compared with 26 cents in third quarter 1999, both before
extraordinary charges for debt extinguishment. All earnings per share figures
refer to diluted earnings per share. Third quarter net earnings were
$216 million, compared with $241 million in 1999, before a $1 million
extraordinary charge in the current quarter and a $9 million extraordinary
charge in third quarter 1999, both for debt extinguishment.
"Our third quarter results reflect the strength of last year's
performance, particularly at Target, and are in line with our most recent
guidance. Similarly, our current outlook for the holiday season is consistent
with our expectation of low double-digit growth in EPS for the full year,"
said Bob Ulrich, chairman and chief executive officer of Target Corporation.
"Over the long-term, we remain confident in our ability to achieve average
annual earnings per share growth of 15 percent or more."
For the nine-month period, earnings per share increased 10 percent to
78 cents, compared with 71 cents in 1999. Nine-month net earnings were
$712 million, an increase of 7 percent compared with $663 million in the first
nine months of 1999, before an extraordinary charge of $13 million in 1999,
for debt extinguishment.
Total revenues in the third quarter increased 8.3 percent to $8.582
billion from $7.927 billion in 1999, driven by a 10.5 percent revenue increase
at Target. Comparable-store sales for third quarter 2000 increased
2.9 percent.
In the third quarter, gross margin rate was unfavorable to last year,
principally due to higher markdowns at both Target and Department Stores.
Operating expense rate was also unfavorable, reflecting lack of sales
leverage.
Pre-tax segment profit decreased 8 percent to $493 million, compared with
$536 million in third quarter 1999, as pre-tax profit declined 6% at Target
and 42% at Department Stores. Mervyn's pre-tax profit increased
30 percent. (Pre-tax segment profit is earnings before LIFO, securitization
effects, interest, other expense and unusual items.)
Other Factors
For the quarter and year-to-date, pre-tax contribution from credit
increased due to the continued growth of the Target Guest Card and improving
trends in delinquencies and writeoffs in each of the three segments.
The total of interest expense and interest equivalent for the quarter
increased $7 million compared with third quarter 1999 due to higher average
funded balances.
The Company's effective income tax rate was 38.5 percent, compared with
38.8 percent last year.
During the quarter, the Company repurchased $219 million of its common
stock, buying back 8.5 million shares at an average price of $25.59 per share.
Since the inception of its share repurchase program, the Company has
repurchased a total of 39.2 million shares at an average price of $29.62 per
share, representing a total investment of $1,161 million.
Miscellaneous
Target Corporation will webcast its third quarter earnings conference call
at 9:30 am CST today. Investors and the media are invited to listen to the
call through the Company's website at http://www.target.com (click on
"company/Target Corporation/investor information/investors' overview"). A
telephone replay of the call will be available beginning at approximately
11:30 am CST today through the end of business on November 15, 2000. The
replay number is 800-633-8284 and the passcode is 16728737.
Forward-looking statements in this release should be read in conjunction
with the cautionary statements in Exhibit (99)C to the Company's 1999
Form 10-K.
Target Corporation operates large-store general merchandise formats,
including discount stores, moderate-priced promotional and traditional
department stores. The company currently operates 1,309 stores in 46 states.
This includes 978 Target stores, 267 Mervyn's stores and 64 Department Stores.
Target Corporation news releases are available at http://www.target.com or
prnewswire.com or by fax through Company News on Call at 800-758-5804
extension 342677.
(Tables follow)
TARGET CORPORATION
CONSOLIDATED RESULTS OF OPERATIONS
Three Months Ended Nine Months Ended
(Millions, except
per share
data) October 28, October 30, % October 28, October 30, %
(Unaudited) 2000 1999 Change 2000 1999 Change
Sales $8,444 $7,806 8.2% $24,180 $22,408 7.9%
Net credit
revenues 138 121 13.3 399 364 9.5
Total
revenues 8,582 7,927 8.3 24,579 22,772 7.9
Cost of sales 5,860 5,365 9.3 16,656 15,409 8.1
Selling,
general and
administrative
expense 2,024 1,855 9.1 5,768 5,355 7.7
Depreciation
and
amortization 239 213 12.5 693 631 9.9
Interest expense 108 102 5.7 304 294 3.4
Earnings before
income taxes and
extraordinary
charges 351 392 (10.6) 1,158 1,083 6.9
Provision for
income taxes 135 151 (11.3) 446 420 6.1
Net earnings
before
extraordinary
charges 216 241 (10.1) 712 663 7.4
Extraordinary
charges from
debt
extinguishment,
net of tax 1 9 -- 13
Net earnings $215 $232 (7.4)% $712 $650 9.5%
Earnings before
extraordinary
charges $0.24 $0.27 (10.6)% $0.79 $0.73 6.8%
Extraordinary
charges -- (0.01) -- (0.01)
Basic earnings
per share $0.24 $0.26 (7.8)% $0.79 $0.72 8.9%
Earnings before
extraordinary
charges $0.24 $0.26 (7.8)% $0.78 $0.71 10.1%
Extraordinary
charges -- (0.01) -- (0.01)
Diluted earnings
per share $0.24 $0.25 (5.0)% $0.78 $0.70 12.2%
Weighted average
common shares
outstanding:
Basic 900.4 878.6 905.8 881.9
Diluted 907.8 927.4 914.7 933.1
TARGET CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Millions) October 28, October 30,
(Unaudited) 2000 1999
ASSETS
Cash and cash equivalents $370 $246
Retained securitized receivables 1,708 1,479
Inventory 5,219 4,757
Other 626 622
Total current assets 7,923 7,104
Property and equipment, net 10,957 9,766
Other 745 752
Total assets $19,625 $17,622
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Accounts payable $3,974 $3,394
Current portion of long-tem debt and notes payable 2,276 1,015
Other 1,627 1,561
Total current liabilities 7,877 5,970
Long-term debt 4,846 5,263
Other 956 887
Shareholders' investment 5,946 5,502
Total liabilities and shareholders' investment $19,625 $17,622
Common shares outstanding 895.7 876.4
Target Corporation
(Millions)
(Unaudited)
REVENUES
Three Months Ended Nine Months Ended
October 28, October 30, % October 28, October 30, %
2000 1999 Change 2000 1999 Change
Target $6,721 $6,083 10.5% $19,377 $17,517 10.6%
Mervyn's 1,005 965 4.1 2,836 2,826 O.3
Department Stores 739 757 (2.4) 2,067 2,139 (3.4)
Other 117 122 (3.2) 299 290 3.3
TOTAL $8,582 $7,927 8.3% $24,579 $22,772 7.9%
COMPARABLE-STORE SALES
Comparable-store sales are sales from stores open longer than one year.
% Change % Change
Three Months Ended Nine Months Ended
October 28, 2000 October 28, 2000
Target 3.5% 3.8%
Mervyn's 3.9 0.5
Department Stores (3.0) (4.2)
TOTAL 2.9% 2.6%
INVENTORY
October 28, October 30, %
2000 1999 Change
Target $3,723 $3,297 12.9%
Mervyn's 691 739 (6.5)
Department Stores 563 605 (6.8)
Other 242 116 n/a
TOTAL $5,219 $4,757 9.7%
Target Corporation
(Unaudited) (Millions)
PRE-TAX SEGMENT PROFIT AND EARNINGS RECONCILIATION
Pre-tax segment profit is earnings before LIFO, securitization effects,
interest, other expense and unusual items.
Three Months Ended Nine Months Ended
October 28, October 30, % October 28, October 30, %
2000 1999 Change 2000 1999 Change
Target $386 $411 (6.1)% $1,331 $1,211 10.0%
Mervyn's 60 46 29.5 161 136 17.7
Department Stores 47 79 (41.5) 111 176 (37.1)
Total pre-tax
segment profit 493 536 (8.3) 1,603 1,523 5.2
Securitization
adjustment
(interest
equivalent) (13) (12) (37) (36)
Interest expense (108) (102) (304) (294)
Other (21) (30) (104) (110)
Earnings before
income taxes and
extraordinary
items $351 $392 (10.6)% $1,158 $1,083 6.9%
EBITDA
EBITDA is pre-tax segment profit before depreciation and amortization.
Three Months Ended Nine Months Ended
October 28, October 30, % October 28, October 30, %
2000 1999 Change 2000 1999 Change
Target $553 $553 --% $1,814 $1,628 11.5%
Mervyn's 92 80 13.9 259 240 7.5
Department Stores 82 112 (26.9) 211 276 (23.5)
TOTAL $727 $745 (2.5)% $2,284 2,144 6.5%
Three Months Ended Nine Months Ended Twelve Months Ended
Oct. 28, Oct. 30, Oct. 28, Oct. 30, Oct. 28, Oct. 30,
2000 1999 2000 1999 2000 1999
Pre-tax Segment
Profit as a %
of Revenues:
Target 5.7% 6.8% 6.9% 6.9% 7.7% 7.4%
Mervyn's 6.0% 4.8% 5.7% 4.8% 5.6% 5.8%
Department Stores 6.3% 10.5% 5.4% 8.2% 7.7% 9.4%
EBITDA as a % of
Revenues:
Target 8.2% 9.1% 9.4% 9.3% 9.9% 9.6%
Mervyn's 9.1% 8.3% 9.1% 8.5% 8.8% 9.1%
Department Stores 11.1% 14.8% 10.2% 12.9% 12.1% 13.7%
NUMBER OF STORES AND RETAIL SQUARE FEET
Number of Stores Retail Square Feet
October 28, October 30, October 28, October 30,
2000 1999 200O 1999
Target 978 914 112,332 102,859
Mervyn's 267 267 21,628 21,661
Department Stores 64 64 14,175 14,058
TOTAL 1,309 1,245 148,135 138,578
Retail square feet in thousands; reflects total square feet less office,
warehouse and vacant space.
SOURCE Target Corporation
CONTACT: Susan Kahn of Target Corporation, 612-370-6735/
