Target US segment sales down 0.9 percent in 2013

REPORT_ Target Corporation reported full-year 2013 adjusted earnings per share of 4.38 dollars and fourth quarter net earnings of 520 million dollars, or 0.81 dollars per share, and full-year net earnings of 1,971 million dollars, or 3.07 dollars per share. Full-year 2013 sales decreased 0.9

percent to 71.3 billion dollars from 72 billion dollars last year and a 0.4 percent decrease in comparable sales, partially offset by the contribution from new stores. Full-year EBIT was 4,959 million dollars in 2013, a decrease of 11.3 percent from 5,589 million dollars in 2012. Full-year 2013 EBITDA and EBIT margin rates were 9.8 percent and 7.0 percent, respectively, compared with 10.6 percent and 7.8 percent in the revised US segment in 2012. Full-year gross margin rate increased to 29.8 percent from 29.7 percent in 2012.

Dilution

related to the Canadian segment affected fourth quarter and full-year GAAP EPS by 40 cents and 1.13 dollars, respectively. Adjusted earnings per share were 1.30 dollars in fourth quarter 2013, down 21.2 percent from 1.65 dollars in 2012. Full-year 2013 adjusted EPS of 4.38 dollars was down 8.0 percent from 4.76 dollars in 2012.

“For more than 50 years Target has succeeded by focusing on our guests,” said Gregg Steinhafel, Chairman, President and Chief Executive Officer of Target Corporation, adding, “During the first half of the fourth quarter, our guest-focused holiday merchandising and marketing plans drove better-than-expected sales.”

Fiscal 2014 will be Target’s first full year of operating stores in Canada. As a result, beginning with first quarter 2014, the company will no longer exclude Canadian segment results from adjusted EPS. In first quarter 2014, the Minneapolis headquartered company expects adjusted EPS of 60 cents to 75 cents, reflecting operating results in our US and Canadian segments. For full-year 2014, Target expects adjusted EPS of 3.85 dollars to 4.15 dollars, reflecting operating results in our US and Canadian segments.

In fourth quarter 2013, sales decreased 6.6 percent to 20.9 billion dollars from 22.4 billion dollars last year, reflecting the impact of an additional accounting week in 2012 and a 2.5 percent decrease in comparable sales. Fourth quarter EBITDA and EBIT margin rates were 9.2 percent and 6.8 percent, respectively, compared with 10.4 percent and 8.1 percent in the revised US segment in 2012.

In fourth quarter 2013, the Canadian segment generated sales of 623 million dollars and EBIT of 329 million dollars. During fiscal 2013, Target’s Canadian segment generated sales of 1.3 billion dollars at a gross margin rate of 14.9 percent and EBIT of 941 million dollars.