10:59 AM, Jul 13, 2017 — US retailer Target (TGT) has adjusted its profit forecast for the second quarter and said it expects growth in comparable sales in the period after traffic and sales trends improved.
The Minneapolis-based company, which has 1,807 stores, said on Thursday it now expects adjusted and GAAP earnings per share (EPS) to be above the high end of its previously estimated range of $0.95 to $1.15. Analysts in a Capital IQ poll expected adjusted EPS of $1.06 before Thursday’s company statement.
Comparable sales are expected to see a “modest increase” in the quarter from a year earlier on better sales and customer traffic, it said. In May, after it published its first-quarter financial report it said it expected second-quarter same-store sales to decline by a low single digit percentage.
For the second quarter, both GAAP and adjusted EPS are expected to reflect a $0.05 to $0.09 benefit driven by the net tax effect of the company’s global sourcing operations. Also, GAAP EPS is expected to reflect $0.02 to $0.03 of pressure related to “the unfavorable resolution of tax matters,” it said.
Target is modernizing its stores and revamping its line of brands after competition from online retailers, such as Amazon resulted in a slump in comparable sales in the first quarter. In May, it projected a low single-digit decline in sales for the entire year. It reported a 1.3% drop in comparable sales in the first quarter.
In the first quarter, adjusted EPS was $1.21, down from $1.29 a year earlier, but better than the company’s own forecast range of $0.80 to $1.00.
The company plans to report earnings for the second quarter on Aug. 16.
Companies: Target Corporation
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