Target Corporation reported fourth quarter 2014 adjusted earnings per share of $1.50, an increase of 14.9 percent from $1.31 in 2013, and full-year adjusted earnings per share of $4.27, a decrease of 2.6 percent from $4.38 last year.
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GAAP earnings per share from continuing operations were $1.49 in fourth quarter and $3.83 in full-year 2014, compared with $1.22 and $4.20 in 2013, respectively.
In fourth quarter, Target recognized a pre-tax loss of $5.1 billion related to its discontinued Canadian operations, resulting in a $(5.59) loss per share.
In first quarter 2015, Target expects adjusted EPS, reflecting results of operations in its single-segment business, of $0.95 to $1.05, compared with $0.92 in first quarter 2014.
Fourth quarter 2014 sales increased 4.1 percent to $21.8 billion from $20.9 billion last year, reflecting a 3.8 percent increase in comparable sales combined with sales from new stores. Segment earnings before interest expense and income taxes (EBIT) were $1,603 million in fourth quarter 2014, an increase of 13.4 percent from $1,413 million in 2013.
Fourth quarter EBITDA and EBIT margin rates were 9.9 percent and 7.4 percent, respectively, compared with 9.2 percent and 6.8 percent in 2013. Fourth quarter gross margin rate was 28.5 percent, compared with 27.6 percent in 2013, reflecting the benefit of annualizing clearance markdowns associated with the fourth quarter 2013 data breach, combined with the benefit of a favorable merchandise mix in fourth quarter 2014.
Fourth quarter SG&A expense rate was 18.6 percent in 2014 compared with 18.4 percent in 2013, reflecting higher marketing, technology and incentive expense rates this year.
Full-year 2014 sales increased 1.9 percent to $72.6 billion from $71.3 billion last year, reflecting a 1.3 percent increase in comparable sales combined with sales from new stores. Fullyear EBIT was $4,761 million in 2014, a decrease of 4.0 percent from $4,959 million last year.
Full-year 2014 EBITDA and EBIT margin rates were 9.5 percent and 6.6 percent, respectively, compared with 9.8 percent and 7.0 percent in 2013. Full-year gross margin rate was 29.4 percent, compared with 29.8 percent in 2013, driven by increased promotional activity in the first three quarters of 2014.
Full-year SG&A expense rate was 19.9 percent in 2014 compared with 20 percent in 2013, reflecting disciplined expense control across the organization. ■