The Minneapolis based retail giant Target (NYSE: TGT) announced second quarter adjusted earnings per share of $1.19 last week, and the results are somewhat mixed in positive and negative signs. The results were at the top of the expected range, but impressively achieved amidst softer than expected year over year sales growth in the US store sales. A growth rate of just 1.2% percent for those locations causes some concern, as the firm is quickly headed into the all important holiday season.
Second quarter GAAP earnings per share of $0.95 were at the mid-point of the expected range, including (21) cents of dilution related to the Canadian Segment. Target opened 44 Canadian stores in the second quarter, bringing the total store count to 68 and passing the half-way mark to the goal of operating 124 stores in Canada by year-end. In the second quarter, the Company returned more than $1.1 billion to shareholders through dividends and share repurchase.
The retail space has grown increasingly competitive in recent years, as Wal-Mart (NYSE: WMT), Sears (NASD: SHLD), and others all vie for market share. The struggle for dominance in discount retail continues to push prices down for the consumers, and while that may be satisfying, it is also depressing profits and pushing costs down throughout the supply chain. While a firm like JC Penney (NYSE: JCP) aspires for the likes of profits Target has posted, Target is held to a higher standard, and market insiders will soon be looking towards performance through end of year to gauge continued growth and progress for the firm.
