(By Salman - iStockAnalyst Writer)Target Corp. (NYSE:
) is scheduled to release its second quarter financial results before the market open on Tuesday, August 18, 2009. Analysts currently expect the company to report earnings of 18 cents per share on revenue of $15.15 billion. In the year ago period, Target Corp. reported earnings of 82 cents a share on revenue of $15.0 billion.
Target Corporation is the second largest discount retailer and operates general merchandise and food discount stores in the United States. The company offers an assortment of general merchandise, including consumables and commodities; electronics, entertainment, sporting goods, and toys; apparel and accessories; and home furnishings and decor, as well as a line of food items primarily under the Target and Super Target brands. As of January 31, 2009, it operated 1,682 stores and 34 distribution centers. The retailer generated $64 billion of revenue in fiscal 2008.
The Minneapolis, Minnesota-based company's net income for the
first quarter declined 13% to $522 million, or $0.69 per share, from $602 million, or $0.74 per share, in the year-ago period. Total revenue for the quarter increased 0.2% to $14.83 billion from $14.80 billion. Analysts on average had a forecast earnings of 59 cents per share for the quarter on revenue of $14.81 billion. Gross margin rate for the segment of 30.8% was unchanged from prior year, due to favorable markup and fewer markdowns than expected.
Consumer spending has declined steeply since the financial meltdown intensified last year. Discount retailers have been benefiting from the changed economic realities as cash-strapped shoppers focus only on necessities amid the economic slowdown. However, Target gets more than 40% of its revenue from nonessentials such as fashions and housewares that were hurt as consumers restrained off-the cuff spending and shopped mainly for necessities. The company has implemented several cost saving measures, which includes freezing salary hikes for senior management, suspending buybacks, tightening credit card underwriting and credit granting, implementing initiatives to improve store productivity, reducing planned new store openings, and cutting outside contractor support, travel, entertainment and other headquarters operating expenses. For the three months ended May 2, 2009, SG&A expense rate was 20.9 percent, compared with 21.1 percent for the same period last year.
Early in June, Target said that the preliminary second-quarter comparable sales sank 6.2%, a figure at the low end of management's guidance for a low-to-mid single digit decline.
