MINNEAPOLIS, March 6 /PRNewswire/ -- Target Corporation (NYSE: TGT) today
reported earnings per share for the fourth quarter ended Feb. 3, 2001 of
61 cents, compared with 56 cents before unusual items in fourth quarter 1999.
On the same basis, fourth-quarter net earnings increased 5.9 percent to
$552 million, compared with $522 million in 1999. All earnings per share
figures refer to diluted earnings per share.
For the full year, diluted earnings per share were $1.38, an increase of
9.2 percent compared with $1.27 before unusual items in 1999. Net earnings
were $1.264 billion, up 6.7 percent compared with $1.185 billion before
unusual items in 1999. Including unusual items for 1999, 2000 earnings per
share grew 13.1 percent and net earnings rose 10.5 percent. Unusual items in
the prior year were principally related to the early extinguishment of debt.
"We are satisfied with our fourth quarter and total year 2000 results in
light of the current economic environment," said Bob Ulrich, chairman and
chief executive officer of Target Corporation. "In 2001, we will continue to
manage our business with a disciplined approach and, over the long-term, we
remain confident in our ability to achieve average annual earnings per share
growth of 15 percent."
Separately, Target Corporation also announced that it has agreed to
acquire the rights to 35 former Wards stores. Following extensive remodeling
efforts, the company plans to open 30 or more of these locations in 2002 as
new Target stores.
"The acquisition of these former Wards stores was an excellent opportunity
for Target to purchase sites in a number of premier markets, including
California, where prime real estate is particularly difficult to find," Ulrich
said.
Full-Year Results
For fiscal 2000, a 53-week year, total revenues increased 9.5 percent to
$36.903 billion from $33.702 billion in 1999, a 52-week period. In addition
to the extra week, revenue growth in 2000 reflected 52-week comparable store
sales growth of 2.4 percent and contribution from Target's new store
expansion. (Total revenues include retail sales and net credit revenues.
Comparable-store sales are sales from stores open longer than one year.)
The company's full-year gross margin rate decreased primarily due to the
mix impact of growth at Target, our lowest margin rate division. (Gross
margin rate represents gross margin as a percentage of sales.)
The full-year operating expense rate was essentially even with the prior
year, benefiting from overall growth at Target, our lowest expense rate
division, offset by lack of sales leverage at both Mervyn's and Marshall
Field's. (Operating expense rate represents selling, general and
administrative expense, including buying and occupancy, advertising, start-up
and other expense, as a percentage of revenues.)
For the year, pre-tax segment profit increased 6.3 percent to
$2.682 billion, compared with $2.523 billion in 1999. Target's pre-tax profit
increased 10.0 percent; Mervyn's pre-tax profit grew 31.1 percent; and
Marshall Field's pre-tax profit declined 36.0 percent. (Pre-tax segment
profit is earnings before LIFO, securitization effects, interest, other
expense and unusual items.)
Fourth-Quarter Results
Reflecting a 14-week vs. 13-week comparison, fourth-quarter revenues
increased 12.8 percent to $12.324 billion from $10.930 billion in the same
period last year. Thirteen-week comparable-store sales for fourth quarter
2000 increased 1.8 percent.
Both the gross margin rate and the operating expense rate in the quarter
were unfavorable to the prior year period.
Fourth-quarter 2000 pre-tax segment profit increased 7.9 percent to
$1.079 billion, compared with $1.000 billion in the fourth quarter of 1999.
Other Factors
Fourth-quarter and full-year gross margin results include a pre-tax LIFO
charge of $4 million in 2000, compared with a $7 million credit in the same
periods in 1999. On a year-over-year basis, LIFO was unfavorable to full-year
earnings per share by $.01.
Net interest expense and interest equivalent for the quarter increased
$22 million compared with fourth quarter 1999 due to higher average funded
balances and the impact of the 14th week, partially offset by a lower average
portfolio interest rate. For the full year, net interest expense and interest
equivalent increased $33 million due to higher average funded balances and the
impact of the 53rd week, partially offset by a lower average portfolio
interest rate.
For the full year, credit revenue and profitability grew essentially in
line with growth in accounts receivable serviced. The contribution from
credit in 2000 increased 8.1 percent to $400 million from $370 million in
1999, on year-end serviced receivables of $2.91 billion and $2.68 billion,
respectively.
The company's annual effective income tax rate was 38.4 percent, compared
with 38.8 percent last year.
During the quarter, the company repurchased $18 million of its common
stock, acquiring 0.8 million shares at an average price of $23.21 per share.
For the year, the company repurchased 21.2 million shares at an average price
of $27.92, investing $591 million in its common stock. Since the inception of
its share repurchase program, the company has repurchased a total of
40.0 million shares at an average price of $29.50 per share, representing a
total investment of $1.18 billion.
Miscellaneous
Target Corporation will webcast its fourth 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 March 7, 2001. The replay
number is 800-633-8284 and the passcode is 17960665.
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.
In a separate announcement issued this morning, Target Corporation also
released its sales results for the month of February.
Target Corporation operates large-store general merchandise formats,
including discount stores, moderate-priced promotional and traditional
department stores, as well as a direct mail and on-line business called
target.direct. At year-end, the company operated 1,307 stores in 46 states.
This included 977 Target stores, 266 Mervyn's stores and 64 Marshall Field's
stores.
Target Corporation news releases are available at http://www.target.com or
http://www.prnewswire.com , or by fax, through Company News on Call at
800-758-5804 extension 342677.
CONSOLIDATED RESULTS OF OPERATIONS
(Unaudited)
Three Months Ended Year Ended
(Millions, except Feb. 3, Jan. 29, % Feb. 3, Jan. 29, %
per share data) 2001 2000 Change 2001 2000 Change
Sales $12,182 $10,804 12.8% $36,362 $33,212 9.5%
Net credit revenues 142 126 13.1 541 490 10.4
Total revenues 12,324 10,930 12.8 36,903 33,702 9.5
Cost of sales 8,639 7,620 13.4 25,295 23,029 9.8
Selling, general and
administrative
expense 2,422 2,135 13.4 8,190 7,490 9.3
Depreciation and
amortization 247 223 10.6 940 854 10.1
Interest expense 121 99 22.6 425 393 8.2
Earnings before income
taxes and extraordinary
charges 895 853 5.1 2,053 1,936 6.1
Provision for income
taxes 343 331 3.8 789 751 5.1
Net earnings before
extraordinary charges 552 522 5.9 1,264 1,185 6.7
Extraordinary charges
from debt extinguishment,
net of tax -- 28 -- 41
Net earnings $552 $494 11.8% $1,264 $1,144 10.5%
Earnings before
extraordinary charges $0.62 $0.58 5.2% $1.40 $1.32 5.8%
Extraordinary charges -- (0.03) -- (0.04)
Basic earnings per
share $0.62 $0.55 11.2% $1.40 $1.28 9.6%
Earnings before
extraordinary charges $0.61 $0.56 8.2% $1.38 $1.27 9.2%
Extraordinary charges -- (0.03) -- (0.04)
Diluted earnings per
share $0.61 $0.53 14.3% $1.38 $1.23 13.1%
Weighted average
common shares
outstanding:
Basic 896.5 884.9 903.5 882.6
Diluted 907.8 926.1 913.0 931.3
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Millions) February 3, January 29,
2001 2000
ASSETS
Cash and cash equivalents $356 $220
Receivable-backed securities 1,941 1,724
Inventory 4,248 3,798
Other 759 741
Total current assets 7,304 6,483
Property and equipment, net 11,418 9,899
Other 768 761
Total assets $19,490 $17,143
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Accounts payable $3,576 $3,514
Current portion of long-term debt and
notes payable 857 498
Other 1,868 1,838
Total current liabilities 6,301 5,850
Long-term debt 5,634 4,521
Other 1,036 910
Shareholders' investment 6,519 5,862
Total liabilities and shareholders'
investment $19,490 $17,143
Common shares outstanding 897.8 911.7
Target Corporation
(Millions)
REVENUES
(Unaudited)
Three Months Ended
February 3, January 29, % Change
2001 2000 14 weeks 13 weeks
Target $9,901 $8,563 15.6% 10.2%
Mervyn's 1,316 1,273 3.4 (0.2)
Marshall Field's 944 935 0.9 (3.1)
Other 163 159 2.4 (1.7)
TOTAL $12,324 $10,930 12.8% 7.7%
Target Corporation
(Millions)
REVENUES
Year Ended
February 3, January 29, % Change
2001 2000 53 weeks 52 weeks
Target $29,278 $26,080 12.3% 10.5%
Mervyn's 4,152 4,099 1.3 0.2
Marshall Field's 3,011 3,074 (2.1) (3.3)
Other 462 449 3.0 1.5
TOTAL $36,903 $33,702 9.5% 7.9%
COMPARABLE-STORE SALES
Comparable-store sales are sales from stores open longer than one year.
The calculations exclude the 14th and 53rd week.
% Change % Change
Three Months Ended Year Ended
February 3, 2001 February 3, 2001
Target 2.7% 3.4%
Mervyn's (0.3) 0.3
Marshall Field's (3.4) (4.0)
TOTAL 1.8% 2.4%
INVENTORY
February 3, January 29, %
2001 2000 Change
Target $3,090 $2,739 12.9%
Mervyn's 561 501 11.9
Marshall Field's 396 438 (9.5)
Other 201 120 67.1
TOTAL $4,248 $3,798 11.9%
Target Corporation
(Millions)
PRE-TAX SEGMENT PROFIT AND EARNINGS RECONCILIATION
Pre-tax segment profit is earnings before LIFO, securitization effects,
interest, other expense and unusual items.
(Unaudited)
Three Months Ended Year Ended
Feb. 3, Jan. 29, % Feb. 3, Jan. 29, %
2001 2000 Change 2001 2000 Change
Target $892 $811 10.0% $2,223 $2,022 10.0%
Mervyn's 108 69 57.7 269 205 31.1
Marshall Field's 79 120 (34.4) 190 296 (36.0)
Total pre-tax segment
profit 1,079 1,000 7.9 2,682 2,523 6.3
LIFO (provision) credit (4) 7 (4) 7
Securitization adjustment
(interest equivalent) (13) (13) (50) (49)
Interest expense (121) (99) (425) (393)
Mainframe outsourcing -- -- -- (5)
Other (46) (42) (150) (147)
Earnings before income
taxes and extraordinary
items $895 $853 5.1% $2,053 $1,936 6.1%
EBITDA
(Unaudited)
EBITDA is pre-tax segment profit before depreciation and amortization.
Three Months Ended Year Ended
Feb. 3, Jan. 29, % Feb. 3, Jan. 29, %
2001 2000 Change 2001 2000 Change
Target $1,069 $961 11.2% $2,883 $2,589 11.4%
Mervyn's 141 103 36.9 400 343 16.3
Marshall Field's 112 153 (27.0) 323 429 (24.7)
TOTAL $1,322 $1,217 8.6% $3,606 $3,361 7.3%
Three Months Ended Year Ended
February 3, January 29, February 3, January 29,
2001 2000 2001 2000
Pre-tax Segment Profit
as a % of Revenues:
Target 9.0% 9.5% 7.6% 7.8%
Mervyn's 8.2% 5.4% 6.5% 5.0%
Marshall Field's 8.3% 12.8% 6.3% 9.6%
EBITDA as a % of Revenues:
Target 10.8% 11.2% 9.8% 9.9%
Mervyn's 10.7% 8.1% 9.6% 8.4%
Marshall Field's 11.9% 16.4% 10.7% 14.0%
NUMBER OF STORES AND
RETAIL SQUARE FEET
(Unaudited)
Number of Stores Retail Square Feet
Feb. 3, Jan. 29, Feb. 3, Jan. 29,
2001 2000 2001 2000
Target 977 912 112,604 102,945
Mervyn's 266 267 21,555 21,635
Marshall Field's 64 64 14,174 14,060
TOTAL 1,307 1,243 148,333 138,640
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/
