Unusual Charges Sidetrack Target's Third-Quarter Earnings; Revenues Increased 9%20 Nov, 2001 By: Hive News
Target Corporation on Tuesday reported earnings per share for the third quarter ended Nov. 3, 2001 of 25 cents before an unusual item, compared with 24 cents in the third quarter ended Oct. 28, 2000. As previously disclosed by the company, the unusual item in the current quarter's results was a pretax charge of $67 million, or 5 cents pershare, related to the impact of restoring securitized accounts receivable to financial statements. Including the unusual item, earnings per share were 20 cents, compared with 24 cents in the third quarter a year ago. All earnings per share figures refer to diluted earnings per share.
Net earnings before the unusual item were $226 million in this year's third quarter, compared with $216 million in third quarter 2000. Including the unusual item, net earnings were $185 million in this year's third quarter.
"On balance, we are pleased with our third quarter results," said BobUlrich, chairman and c.e.o. of Target Corporation. "And, we believe our strategies position us well to deliver reasonable growth inearnings per share in the fourth quarter."
Total revenues in the third quarter increased 9% to $9.354billion from $8.582 billion in 2000, driven by a 12.6% revenue increase at Target Stores. Comparable-store sales for the corporation increased 1.5% in the third quarter 2001.
Third quarter gross margin rate decreased slightly from the prior year, principally due to the mix impact of growth at Target, the lowest gross margin rate division, according to the company. Operating expense rate was unfavorable in the quarter, the company said, as the beneficial mix impact of growth at Target, the lowest operating expense rate division was more than offset by two other factors, the effect on operating expense of the unusual item and the ongoing impact of higher credit expenses related to higher credit revenues.
Pre-tax segment profit increased 5.9% to $522 million, compared with $493 million in third-quarter 2000, as pre-tax profit increased 14.7% at Target. Mervyn's and Field's pre-tax profit declined by 21.6% and 31.7% respectively. (Pre-tax segment profit is earningsbefore LIFO, securitization effects, interest, other expense and unusualitems.)