Target conference call: Buybacks halted, margins to dip with investing in traffic

Execs with Target (TGT) pointed to improving sales trends in May during the firm's earnings call. A "slow" improvement is anticipated with the company investing in growing traffic and sales.

No share repurchases are expected in Q2. Buybacks could be pulled until there is more visibility on the data breach costs.

Lower operating margins are expected with new product investments and as Canada costs pile up.

There is an acknowledgement that Target's performance in Canada has been a disappointment, but not too many details on how the launch will be refined or improved. Excess inventory is still being cleared. REDCard penetration is at 3.9%.

Earnings call webcast

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Comments (4)
  • SunFunRum
    , contributor
    Comments (36) | Send Message
    As long as they don't touch the dividend.
    21 May 2014, 11:51 AM Reply Like
  • Just Some Guy
    , contributor
    Comments (2572) | Send Message
    When the share price is low, that is not necessarily the time to stop buybacks!
    21 May 2014, 02:31 PM Reply Like
  • Dr Joseph Haluska
    , contributor
    Comments (499) | Send Message
    JSG, I agree.
    TGT should buy some insurance, GUARANTEE shoppers safety in their stores, turn this breach nightmare to their advantage, get a lot of free press, borrow a boatload of money for next to nothing and buy back 2 boatloads of stock sending ANOTHER message to customers and investors.
    Sure, my plan can be easily ripped apart. But I'm betting there are a few guys in the room smart enough to make it work. And I'm betting on it. BIG. long TGT.
    28 May 2014, 08:33 PM Reply Like
  • Merrill McHenry, CFA
    , contributor
    Comments (38) | Send Message
    When you're low on cash losing $200 mil A QUARTER AFTER REDUCING GUIDANCE $400 MIL A QUARTER - all JUST in Canada is no time to deplete vital cash.
    I'm from US, 8 yrs ago to Canada. Canada could be TGT's Waterloo. Moreover, with Real Median Wages down > 6% last 8 yr's consumers will shop cheaper that TGT.


    TGT could be odd man out on several fronts.
    26 May 2014, 12:04 PM Reply Like
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