Target Corp. posted first-quarter earnings that topped analysts' estimates after refining its product lineup and attracting shoppers with kids and wellness items.Excluding some items, earnings amounted to $1.10 a share in the period, which ended May 2, the Minneapolis-based company said today in a statement. Analysts had predicted $1.02 on average, according to data compiled by Bloomberg.
Chief Executive Officer Brian Cornell has been sprucing up U.S. stores after abandoning the chain's money-losing Canadian operations in January. Cornell, a former PepsiCo Inc. executive who took the reins at Target last August, has tried to entice shoppers with exclusive merchandise such as the Lilly Pulitzer collection. Products for babies and kids sold especially well last quarter, the company said.
"We like the initiatives Target has in place," Sean Naughton, an analyst for Piper Jaffray Cos., said in a note before the earnings were released.
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The stock has gained 2.6 per cent this year through Tuesday's close, compared with a 3.3 per cent advance for the Standard & Poor's 500 Index. Wal-Mart Stores Inc., meanwhile, is down 11 per cent so far in 2015.
Target's earnings will be $1.04 to $1.14 a share in the second quarter, the company said. Analysts had estimated $1.12 on average, according to data compiled by Bloomberg.
In January, Target announced it was walking away from Canada less than two years after opening stores there. Dismantling operations in the Canadian division, which employed 17,600 people, led to a $5.1-billion writedown in the fourth quarter. The Canada unit had amassed more than $2-billion in operating losses since 2011.
Target also suffered a data breach during the holiday season of 2013, and the fallout has extended until this year. Last month, the company agreed to pay banks $19-million for costs they incurred in the attack. Since the fourth quarter of 2013, Target has reported $166-million in expenses related to the breach.