MINNEAPOLIS, Feb 28, 2002 /PRNewswire-FirstCall via COMTEX/ -- Target
Corporation (NYSE: TGT) today reported earnings per share for the fourth quarter
ended Feb. 2, 2002 of 73 cents, compared with 61 cents in the fourth quarter
2000, before a 1 cent extraordinary charge in the current quarter for debt
repurchase. On the same basis, fourth-quarter net earnings increased 20.1
percent to $663 million, compared with $552 million in 2000. All earnings per
share figures refer to diluted earnings per share.
For the full year, diluted earnings per share before unusual items were $1.56,
an increase of 12.4 percent compared with $1.38 in 2000. On the same basis, net
earnings were $1.416 billion, up 12.0 percent compared with $1.264 billion.
Including unusual items, 2001 net earnings grew 8.3 percent to $1.368 billion
and earnings per share rose 8.6 percent to $1.50. In addition to the fourth
quarter extraordinary charge for debt repurchase, unusual items in 2001 included
a third quarter pre-tax charge of $67 million, or 5 cents per share, related to
the impact of restoring our securitized accounts receivable to our financial
statements.
"We are extremely pleased with our overall results for fiscal 2001, particularly
the strength of our fourth quarter," said Bob Ulrich, chairman and chief
executive officer of Target Corporation. "In 2002, 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."
Full-Year Results
For fiscal 2001, a 52-week year, total revenues increased 8.1 percent to $39.888
billion from $36.903 billion in 2000, a 53-week period. This revenue growth
reflected 52-week comparable store sales growth of 2.7 percent as well as
contribution from Target's new store expansion and from credit card operations.
(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 was essentially unchanged from a year
ago as rate improvements at both Target and Mervyn's were offset by unfavorable
rate performance at Marshall Field's and the mix impact of growth at Target, our
lowest gross margin rate division. (Gross margin rate represents gross margin as
a percentage of sales.)
The full-year expense rate, excluding credit card operations, was favorable to
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. (Expense rate represents selling, general and administrative expenses
as a percentage of sales. This measure of expense includes buying and occupancy,
advertising, start-up and other expense, and excludes depreciation and expenses
associated with credit card operations.)
The full-year contribution of the company's credit card operations increased
11.2 percent to $445 million from $400 million last year, on growth in average
receivables serviced of 15.8 percent. At year-end, gross receivables serviced
were $4.092 billion, a significant increase from $2.905 billion at year-end last
year, principally due to the national rollout of the Target Visa credit card.
Results of credit card operations are reflected in the pre-tax segment profit of
each of our three business segments.
For the year, pre-tax segment profit increased 10.6 percent to $2.965 billion,
compared with $2.682 billion in 2000. Target's pre-tax profit increased 14.5
percent; Mervyn's pre-tax profit grew 6.1 percent; and Marshall Field's pre-tax
profit declined 29.8 percent. (Pre-tax segment profit is earnings before LIFO,
securitization effects, interest, other expense and unusual items.)
Fourth-Quarter Results
Reflecting a 13-week vs. 14-week comparison, fourth-quarter revenues increased
7.4 percent to $13.237 billion from $12.324 billion in the same period last
year. Thirteen-week comparable-store sales for fourth quarter 2001 increased 4.6
percent.
Both the gross margin rate and the expense rate in the quarter were favorable to
the prior year period. Gross margin rate increased principally due to
exceptional strength at Target Stores. Contribution from the corporation's
credit card operations to pre-tax segment profit was essentially even with last
year.
Fourth-quarter 2001 pre-tax segment profit increased 17.9 percent to $1.272
billion, compared with $1.079 billion in the fourth quarter of 2000, due to
strong growth at Target and Mervyn's, slightly offset by the results of Marshall
Field's.
Other Factors
Fourth-quarter and full-year gross margin results include a pre-tax LIFO charge
of $8 million in 2001, compared with a $4 million charge in the same periods in
2000. On a year-over-year basis, LIFO had no impact on earnings per share.
Net interest expense and interest equivalent for the quarter decreased $7
million compared with fourth quarter 2000 reflecting the benefit of a lower
average portfolio interest rate and one less week in the current quarter,
partially offset by substantially higher average funded balances. For the full
year, net interest expense and interest equivalent increased $16 million due to
higher average funded balances, partially offset by a lower average portfolio
interest rate and the effect of one less week in 2001.
The company's annual effective income tax rate was 38.0 percent, compared with
38.4 percent last year.
Miscellaneous
Target Corporation will webcast its fourth quarter earnings conference call at
9:30am 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 11:30am CST today through the
end of business on March 1, 2002. The replay number is (888) 562-3873.
Forward-looking statements in this release should be read in conjunction with
the cautionary statements in Exhibit (99)C to the company's 2000 Form 10-K.
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 1,381 stores in 47 states. This included 1,053 Target
stores, 264 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
TARGET CORPORATION
CONSOLIDATED RESULTS OF OPERATIONS
(Unaudited)
Three Months Ended Year Ended
(Millions, February 2, February 3, % February 2, February 3, %
except per share 2002 2001 Change 2002 2001 Change
data)
Sales $13,002 $12,182 6.7% $39,176 $36,362 7.7%
Net credit
revenues 235 142 64.8 712 541 31.5
Total revenues 13,237 12,324 7.4 39,888 36,903 8.1
Cost of sales 9,150 8,639 5.9 27,246 25,295 7.7
Selling, general
and administrative
expense 2,445 2,339 4.5 8,420 7,900 6.6
Credit expense 163 83 94.5 463 290 59.5
Depreciation and
amortization 283 247 14.5 1,079 940 14.8
Interest expense 127 121 4.7 464 425 9.1
Earnings before
income taxes and
extraordinary
charges 1,069 895 19.5 2,216 2,053 7.9
Provision for
income taxes 406 343 18.4 842 789 6.7
Net earnings before
extraordinary
charges 663 552 20.1 1,374 1,264 8.7
Extraordinary charge
from debt
extinguishment, net
of tax 5 -- 6 --
Net earnings $658 $552 19.3% $1,368 $1,264 8.3%
Earnings before
extraordinary
charges $0.73 $0.62 19.1% $1.52 $1.40 8.9%
Extraordinary items (0.01) -- (0.01) --
Basic earnings per
share $0.73 $0.62 18.3% $1.52 $1.40 8.5%
Earnings before
extraordinary
charges $0.73 $0.61 19.4% $1.51 $1.38 9.1%
Extraordinary items (0.01) -- (0.01) --
Diluted earnings per
share $0.72 $0.61 18.5% $1.50 $1.38 8.6%
Weighted average
common shares
outstanding:
Basic 903.9 896.5 901.5 903.5
Diluted 913.6 907.8 909.8 913.0
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Millions) February 2, February 3,
2002 2001
ASSETS
Cash and cash equivalents $499 $356
Accounts receivable, net of allowance of $261 3,831 --
Receivable-backed securities -- 1,941
Inventory 4,449 4,248
Other 869 759
Total current assets 9,648 7,304
Property and equipment, net 13,533 11,418
Other 973 768
Total assets $24,154 $19,490
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Accounts payable $4,160 $3,576
Current portion of long-term debt and notes
payable 905 857
Other 1,989 1,868
Total current liabilities 7,054 6,301
Long-term debt 8,088 5,634
Other 1,152 1,036
Shareholders' investment 7,860 6,519
Total liabilities and shareholders' investment $24,154 $19,490
Common shares outstanding 905.2 897.8
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended
(Millions) February 2, February 3,
2002 2001
OPERATING ACTIVITIES
Net earnings before extraordinary items $1,374 $1,264
Reconciliation to cash flow:
Depreciation and amortization 1,079 940
Deferred tax provision 49 1
Other non-cash items affecting earnings 211 237
Changes in operating accounts providing/
(requiring) cash:
Accounts receivable (963) --
Inventory (201) (450)
Other current assets (91) (9)
Other assets (207) 13
Accounts payable 584 62
Accrued liabilities 29 (23)
Income taxes payable 128 87
Cash flow provided by operations 1,992 2,122
INVESTING ACTIVITIES
Expenditures for property and equipment (3,163) (2,528)
Increase in receivable-backed securities (174) (217)
Proceeds from disposals of property and
equipment 32 57
Other (5) (4)
Cash flow required by investing activities (3,310) (2,692)
Net financing requirements (1,318) (570)
FINANCING ACTIVITIES
(Decrease)/increase in notes payable, net (8) 245
Additions to long-term debt 3,250 2,000
Reductions of long-term debt (1,602) (806)
Dividends paid (203) (190)
Repurchase of stock (20) (585)
Other 44 42
Cash flow provided by financing activities 1,461 706
Net increase in cash and cash equivalents 143 136
Cash and cash equivalents at beginning of year 356 220
Cash and cash equivalents at end of period $499 $356
Target Corporation
(Millions)
REVENUES
(Unaudited)
Three Months Ended
February 2, February 3, % Change
2002 2001 14 weeks 13 weeks
Target $10,941 $9,901 10.5% 15.9%
Mervyn's 1,269 1,316 (3.5) (0.1)
Marshall Field's 866 944 (8.3) (4.4)
Other 161 163 (0.5) 3.6
TOTAL $13,237 $12,324 7.4% 12.5%
Target Corporation
(Millions)
REVENUES
Year Ended
February 2, February 3, % Change
2002 2001 53 weeks 52 weeks
Target $32,588 $29,278 11.3% 13.1%
Mervyn's 4,038 4,152 (2.7) (1.7)
Marshall Field's 2,829 3,011 (6.1) (4.8)
Other 433 462 (6.3) (5.0)
TOTAL $39,888 $36,903 8.1% 9.7%
COMPARABLE-STORE SALES
Comparable-store sales are sales from stores open longer than one year.
The calculations are on a 13 and 52 week basis.
% Change % Change
Three Months Ended Year Ended
February 2, 2002 February 2, 2002
Target 6.2% 4.1%
Mervyn's 0.1 (1.5)
Marshall Field's (5.6) (5.7)
TOTAL 4.6% 2.7%
INVENTORY
February 2, February 3, %
2002 2001 Change
Target $3,348 $3,090 8.3%
Mervyn's 523 561 (6.7)
Marshall Field's 348 396 (12.1)
Other 230 201 14.3
TOTAL $4,449 $4,248 4.7%
NUMBER OF STORES AND RETAIL SQUARE FEET
(Unaudited)
Number of Stores Retail Square Feet
February 2, February 3, February 2, February 3,
2002 2001 2002 2001
Target* 1,053 977 125,203 112,939
Mervyn's 264 266 21,425 21,555
Marshall Field's 64 64 14,638 14,584
TOTAL 1,381 1,307 161,266 149,078
Retail square feet in thousands; reflects total square feet less office,
warehouse and vacant space.
*Includes 62 SuperTargets in 2001 and 30 SuperTargets in 2000.
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
February 2, February 3, % February 2, February 3, %
2002 2001 Change 2002 2001 Change
Target $1,078 $892 20.9% $2,546 $2,223 14.5%
Mervyn's 131 108 20.8 286 269 6.1
Marshall
Field's 63 79 (20.2) 133 190 (29.8)
Total
pre-tax
segment
profit 1,272 1,079 17.9 2,965 2,682 10.6
LIFO provision (8) (4) (8) (4)
Securitization
adjustments:
Unusual
item -- -- (67) --
Interest
equivalent -- (13) (27) (50)
Interest
expense (127) (121) (464) (425)
Other (68) (46) (183) (150)
Earnings
before income
taxes and
extraordinary
charges $1,069 $895 19.5% $2,216 $2,053 7.9%
EBITDA (Unaudited)
EBITDA is pre-tax segment profit before depreciation and amortization.
This presentation is not intended to be a substitute for GAAP reported
measures of profitability and cash flow.
Three Months Ended Year Ended
February 2, February 3, % February 2, February 3, %
2002 2001 Change 2002 2001 Change
Target $1,284 $1,069 20.2% $3,330 $2,883 15.5%
Mervyn's 163 141 15.0 412 400 3.0
Marshall
Field's 95 112 (14.8) 268 323 (16.9)
Total
segment
EBITDA 1,542 1,322 16.7 4,010 3,606 11.2
Segment
depreciation
and
amortization (270) (243) (1,045) (924)
Pre-tax segment
profit $1,272 $1,079 17.9% $2,965 $2,682 10.6%
Three Months Ended Year Ended
February 2, February 3, February 2, February 3,
2002 2001 2002 2001
Pre-tax Segment Profit as a
% of Revenues:
Target 9.9% 9.0% 7.8% 7.6%
Mervyn's 10.3% 8.2% 7.1% 6.5%
Marshall Field's 7.3% 8.3% 4.7% 6.3%
EBITDA as a % of Revenues:
Target 11.7% 10.8% 10.2% 9.8%
Mervyn's 12.8% 10.7% 10.2% 9.6%
Marshall Field's 11.0% 11.9% 9.5% 10.7%
CONTRIBUTION FROM CREDIT CARD OPERATIONS (Unaudited)
Three Months Ended Year Ended
February 2, February 3, February 2, February 3,
2002 2001 2002 2001
From Financial Statements:
Net credit revenues 235 142 712 541
Credit expense 163 83 463 290
72 59 249 251
Adjustments:
Intra-company merchant fees 34 34 102 99
Securitization adjustments:
Unusual item -- -- 67 --
Interest equivalent -- 13 27 50
Contribution from
credit card operations 106 106 445 400
SOURCE Target Corporation
CONTACT:
Susan Kahn, investors, +1-612-761-6735,
or Cathy Wright,
financial media, +1-612-761-6627,
both of Target Corporation
/Company News On-Call: http://www.prnewswire.com/gh/cnoc/comp/342677.html
URL:
http://www.target.com
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