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Target turns in a solid year

BY DSN STAFF

MINNEAPOLIS — Fourth-quarter earnings per share at Target advanced 17% to $1.45, compared with $1.24 the prior year, thanks to a seven-cent-per-share tax benefit.

Quarterly profits were slightly more than $1 billion, compared with $936 million the prior year. Fourth-quarter sales increased 2.8% to $20.3 billion, compared with $19.7 billion in the prior year, and were aided by a 2.4% increase in same-store sales.

Target chairman, president and CEO Gregg Steinhafel said the company was very pleased with its fourth-quarter and full-year 2010 financial results as they reflected strong performance in its retail and credit card business segments. Looking forward, Steinhafel said 2011 would be a year in which the company would focus on driving sales and traffic and providing an enhanced shopping experience through strategic initiatives, such as an ambitious remodel program, the 5% REDcard Rewards program and the relaunch later this year of the Target.com platform.

“Beyond 2011, we plan to expand our store footprint in new ways, opening our first CityTarget stores in 2012, and opening 100 to 150 Canadian Target stores in 2013 and 2014. We believe these transformational initiatives position Target for profitable growth in 2011 and many years to come, and will create meaningful shareholder value over time,” Steinhafel said.

CityTarget is the name recently given to the company’s small-format stores.

Profits experienced overall growth, the company reported.

Fourth-quarter gross margins declined to 28.7%, compared with 29.1% last year, due to the impact of the PFresh remodeling program. However, the company also managed to control expenses as evidenced by a decline in its selling, general and administrative expense rate, which dropped to 18.1% from 18.5%.

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Safeway’s EPS above analyst expectations

BY Michael Johnsen

PLEASANTON, Calif. — Safeway surprised analysts Thursday morning with fourth-quarter earnings per share of 62 cents, well above a consensus of 57 cents among analysts.

Total sales were up 0.9% to $12.8 billion in the fourth quarter. Higher fuel sales and an increase in the Canadian exchange rate were offset by reduced sales due to store closures and a 0.8% decline in identical-store sales, excluding fuel, the grocer reported. Same-store sales, excluding fuel, declined 0.5%. Fuel sales rose 23%.

Share value on the NYSE was up 14 cents in mid-day trading to $22.19.

"We are pleased with the improving trends in sales in 2010, driven by our price reductions, reinvigorated private-label brands and targeted marketing,” stated Safeway chairman, president and CEO Steve Burd. “All of our trends are improving, and those trends are continuing into the first quarter," he told analysts Thursday morning. “Our sales improvements are coming from our best customers — who shop more often,” Burd said. That suggested customer retention is on the rise, he added.

Identical-store sales improved each quarter and improved shrink control was a fourth-quarter highlight, Burd said. “We think we did a very good job this year of managing cost but it was hidden from view by deflation,” he said. Burd projected price inflation of more than 1% going forward, and wouldn’t be surprised if inflation eclipsed 2%. Right now, he said, virtually all retailers are passing those price increases along to the consumer.

Safeway plans to issue a press release announcing earnings guidance for March 8.

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Consumers get a peek of what’s in the card aisle at AmericanGreetings.com

BY Allison Cerra

CLEVELAND — Greeting card enthusiasts that want to know what’s new in the card aisles before hitting the stores now can see the latest innovations online, thanks to a new page on American Greetings’ website.

AmericanGreetings.com‘s new page now features the latest product introductions, a special downloadable coupon and a store locator so consumers instantly can find retailers in their area.

"We have always been proud to offer our consumers the very best greetings, whether online or at retail. And with our category continuing to grow, we want to be sure we are making it easy for shoppers to always find the perfect card," said Sally Schriner, president of American Greetings Interactive. "Now, whether someone wants to send an e-card or find out what’s new in the nearest card aisle, they can do it all in one convenient location."

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