Target Management Report December 2011 Sales/ Trading Statement (Transcript)

Jan. 5.12 | About: Target Corporation (TGT)

Target Corporation (NYSE:TGT)

December 2011 Sales/ Trading Statement

January 05, 2012 12:00 am ET

Executives

John Hulbert -

John Hulbert

Comments on reported results in this summary relate to Target Corporation's sales for the 5-week period ended December 31, 2011, compared with the 5-week period ended January 1, 2011. These sales results are included in the table of our sales release issued on January 5, 2012.

For the fiscal December period, reported comparable store sales increased 1.6%. This increase was driven primarily by an increase in average transaction size, combined with a smaller increase in comparable store transactions. Overall comparable store sales in December 2010 increased 0.9%.

Current month's sales release quotes Gregg Steinhafel, Chairman, President and Chief Executive Officer of Target Corporation, as saying, "December sales were below our expectations as growth in Grocery and Beauty offset softness in Electronics and Music, Movies & Books. Sales and traffic were strongest in the week leading up to Christmas as guests waited to shop for last-minute gifts. In 2012, we'll continue to pursue initiatives designed to deliver compelling value and superior shopping experience against the backdrop of continued slow and volatile economic growth."

As a result of softer-than-expected holiday season sales, company currently expects fourth quarter 2011 diluted EPS of $1.35 to $1.43 compared with prior guidance of $1.43 to $1.53. Both current and prior guidance include expenses related to Target's investments in its 2013 Canadian market entry. Both current and prior guidance exclude any reduction in income tax expense from the resolution of income tax uncertainties, which the company expects to be approximately $50 million in the quarter, and also exclude the impacts of a potential credit card receivable sale transaction and/or any potential early extinguishment of non-recourse debt collateralized by credit card receivables.

December comparable store sales in Food increased in the low teens. Comparable store sales in Household Essentials increased in the mid-single digit range, with the strongest performance in Beauty. Comparable store sales in Apparel & Accessories increased in the low single-digit range, with the strongest performance in Kids' Apparel and Intimate, Hosiery performance and the softest performance in Jewelry, Accessories and Shoes. Comparable store sales in Hardlines decreased in the low-single-digit range, with the strongest performance in Toys and the softest performance in Electronics and Music, Movies & Books. Comparable store sales in Home Furnishings & Décor decreased in the low single-digit range, with the strongest performance in Seasonal categories and the softness performance in Decorative Home.

December comparable store sales increased in every region with a relatively small spread between regions. At month end, our inventory was in very good condition.

For the month of January, our comparable store sales results will compare the 4 weeks ending January 28, 2012, to the 4 weeks ended January 29, 2011. We expect a low to mid-single-digit increase in Target's comparable store sales for this period.

Target's current sales disclosure practice includes a sales recording on the day of our monthly sales release. Our next sales recording is expected to be issued on Thursday, February 2, 2012, and may be accessed by calling (866) 526-7639. Text versions of our recordings are available on our Investor Relations website, www.target.com/investors, by clicking on Financial News and then Monthly Sales Summaries.

The statements on expected sales and EPS performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements speak only as of the date they are made and are subject to risks and uncertainties which could cause the company's actual results to differ materially. The most important risks and uncertainties are described in the Risk Factors section of the company's Form 10-K for the fiscal year ended January 29, 2011.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!