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In a press release dated May 20th Target Corporation (TGT) announced results for the First quarter of 2020 ending May 2nd.
The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as US$ x 1,000 except EPS)
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Brian Cornell, CEO |
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1st Quarter Ending
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May 2nd 2020
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May 4th 2019
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Difference (%)
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Sales:
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$19,615,000
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$17,627,000
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+11.3
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Gross profit:
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$5,105,000
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$5,379,000
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-5.1
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Operating income:
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$468,000
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$1,135,000
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-58.8
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Pre-tax Income
Net Income
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$329,000
$284,000
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$1,021,000
$795,000
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-67.8
-64.3
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Diluted earnings per share:
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$0.56
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$1.53
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-63.4
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Gross Margin (%)
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26.0
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30.5
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-14.8
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Operating Margin (%)
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2.4
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6.4
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-62.5
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Profit Margin (%)
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1.5
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4.5
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-66.7
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Long-term Debt:
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$16,322,000
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$13,613,000
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+19.9
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12 Months Trailing:
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Return on Assets (%)
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7.0
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Return on Equity (%)
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28.3
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Operating Margin (%)
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6.1
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Profit Margin (%)
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4.2
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Total Assets
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$44,806,000
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$42,779,000
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+4.7
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Market Capitalization
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$60,075,000
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52-Week Range in Share Price: $76.80 to $ 130.24 50-day Moving average $109.21
Market Close Tuesday May 19th 123.20. Noon May 20th post-release $120.13. TGT beat on the top line but COVID expenditure reduced net earnings and EPS.
Forward P/E 25.6 Beta 0.8
Same-store sales growth was 10.8 percent. Revenue per transaction up 12.5 percent. Food and Beverage and Durables both up 20 percent; Clothing down 20 percent. Digital sales increased by 141 percent and Same-day delivery (Shipt; Click-and –collect; Drive-through) by 278 percent
In commenting on Q1 results Brian Cornell, chairman and CEO stated "Throughout the first quarter, our team and guests faced unprecedented challenges arising from the spread of COVID-19. In the face of those challenges, our team showed extraordinary resilience as guests relied on Target as a trusted resource for their families. With our stores at the center of our strategy, and a significant investment in the safety of our team and guests, our operations had the agility and flexibility needed to meet the changing needs of our business,"
Cornell concluded "With the dedication of our team, the benefit of a sustainable business model and a strong balance sheet, we are confident Target will emerge from this crisis an even stronger retailer, with higher affinity and trust from our guests."
COVID-19 related costs (decontamination, increase in hourly rate of $2, bonuses and incentives) amounted to an incremental cost of $500 million in Q1.
TGT withdrew 2020 guidance based on future uncertainty concerning the economy.