Research Desk Line-up: Costco Wholesale Post Earnings Coverage

LONDON, UK / ACCESSWIRE / June 5, 2017 / Pro-Trader Daily publishes post-earnings coverage on Target Corp. (NYSE: TGT) following the Company's release of its financial results for the first quarter fiscal 2017 (Q1 FY17) on May 17, 2017. The Minneapolis, Minnesota-based Company reported a 20.0% y-o-y growth in its GAAP EPS from continuing operations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Get more of our free earnings reports coverage from other constituents of the Discount, Variety Stores industry. Pro-TD has currently selected Costco Wholesale Corporation (NASDAQ: COST) for due-diligence and potential coverage as the Company announced on May 25, 2017, its operating results for Q3 and first thirty-six weeks of FY17, which ended on May 7, 2017. Register for a free membership today, and be among the early birds that get access to our report on Costco Wholesale when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on TGT; also brushing on COST. With the links below you can directly download the report of your stock of interest free of charge at:

http://protraderdaily.com/optin/?symbol=TGT

http://protraderdaily.com/optin/?symbol=COST

Earnings Reviewed

During the three months ended on April 29, 2017, Target reported sales of $16.02 billion compared to $16.20 billion recorded at the end of Q1 FY16. Sales numbers topped market expectations of $15.62 billion. Meanwhile, comparable sales were down by 1.3% in Q1 FY17 versus a comparable sales growth of 1.2% in the previous year's same period.

The discount store retailer reported GAAP net earnings from continuing operations of $677 million, or $1.22 per diluted share, in Q1 FY17 versus $614 million, or $1.02 per diluted share, in the prior year's comparable quarter. The Company's adjusted earnings from continuing operations were $1.21 per diluted share in Q1 FY17 compared to $1.29 per diluted share in the past year's comparable quarter. Meanwhile, Wall Street had expected the Company to report adjusted earnings of $0.91 per diluted share.

Operating Metrics

In the reported quarter, Target's cost of sales came in at $11.13 billion versus $11.19 billion in the previous year's same quarter. The Company's gross margin during Q1 FY17 was $4.88 billion, or 30.5% of sales, compared to $5.01 billion, or 30.9% of sales, in the year ago same period. The Company's EBIT fell during Q1 FY17 to $1.18 billion, or 7.4% of sales, from $1.32 billion, or 8.2% of sales, in Q1 FY16. The Company's EBITDA was also down to $1.75 billion, or 10.9% of sales, in Q1 FY17 from $1.87 billion, or 11.5% of sales, in the prior year's comparable quarter.

Channel-Performance

The Company's store sales contributed 95.7% to total sales during the reported quarter versus 96.5% of total sales in last year's comparable quarter. In Q1 FY17, stores channel comparable sales change was down by 2.2% compared to a growth of 0.6% in Q1 FY16.

Target's digital channel sales contributed 4.3% to the Company's total sales in Q1 FY17, up from 3.5% of total sales in the prior year's corresponding quarter. Moreover, the channel reported comparable sales growth of 0.8% in Q1 FY17 versus comparable sales growth of 0.6% in Q1 FY16.

Cash Flow & Balance

During Q1 FY17, Target's net cash flow provided by operating activities increased to $1.30 billion from $247 million in the year ago same quarter. At the close of books on April 29, 2017, Target had cash and cash equivalents balance of $2.68 billion versus $4.04 billion at the close of books on April 30, 2016. Additionally, the Company's long-term debt was down to $11.09 billion as on April 29, 2017, from $12.60 billion as on April 30, 2016.

The Company's after-tax return on invested capital (ROIC) for the trailing twelve months through Q1 FY17 was 14.2% compared with 16.0% for the twelve months through Q1 FY16.

Dividend and Buyback

In Q1 FY17, the Company repurchased 4.9 million shares of common stock at an average price of $61.68, for a total investment of $305 million. During the same quarter, the Company also paid dividends of $332 million compared with $336 million in Q1 FY16.

Earnings Guidance

In its guidance for full year FY17, Target expects low single digit decline in comparable sales. Additionally, the Company forecasts a low single digit decline in comparable sales in Q2 FY17 with both GAAP EPS from continuing operations and adjusted EPS in the range of $0.95 to $1.15.

Stock Performance

At the close of trading session on Friday, June 02, 2017, Target's stock price marginally dropped 0.25% to end the day at $55.52. A total volume of 4.49 million shares were exchanged during the session. The Company's shares are trading at a PE ratio of 11.57 and have a dividend yield of 4.32%. The stock currently has a market cap of $30.71 billion.

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