Target Corporation (TGT) has reported a 7.75 percent rise in profit for the quarter ended Apr. 29, 2017. The company has earned $681 million, or $1.23 a share in the quarter, compared with $632 million, or $1.05 a share for the same period last year. On an adjusted basis, earnings per share were at $1.21 for the quarter compared with $1.29 in the same period last year.
Revenue during the quarter went down marginally by 1.11 percent to $16,017 million from $16,196 million in the previous year period. Gross margin for the quarter contracted 45 basis points over the previous year period to 30.49 percent. Total expenses were 92.65 percent of quarterly revenues, up from 91.90 percent for the same period last year. That has resulted in a contraction of 75 basis points in operating margin to 7.35 percent.
Operating income for the quarter was $1,178 million, compared with $1,312 million in the previous year period.
“Target's first quarter financial performance was better than our expectations, reflecting strong execution by our team as they delivered for our guests in a very choppy environment. After starting the quarter with very soft trends, we saw improvement later in the quarter, particularly in March,” said Brian Cornell, chairman and CEO of Target. “We are in the early stage of a multi-year effort to position Target for profitable, consistent long-term growth, and while we are confident in our plans, we are facing multiple headwinds in the current landscape. As a result, we will continue to plan our business prudently while preparing our team to chase business when we have an opportunity.”
On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.95 to $1.15 for the second-quarter.
Operating cash flow improves significantly
Target Corporation has generated cash of $1,303 million from operating activities during the quarter, up 427.53 percent or $1,056 million, when compared with the last year period.
The company has spent $482 million cash to meet investing activities during the quarter as against cash outgo of $279 million in the last year period. It has incurred capital expenditure of $473 million on net basis during the quarter, up 67.73 percent or $191 million from year ago period.
The company has spent $653 million cash to carry out financing activities during the quarter as against cash inflow of $22 million in the last year period.
Cash and cash equivalents stood at $2,680 million as on Apr. 29, 2017.
Debt comes down
Target Corporation has recorded a decline in total debt over the last one year. It stood at $12,803 million as on Apr. 29, 2017, down 9.98 percent or $1,420 million from $14,223 million on Apr. 30, 2016. Interest coverage ratio improved to 8.18 for the quarter from 3.16 for the same period last year.
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