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Sales and earnings are up for Target Corp. in the second quarter of its 2015 fiscal year.
The Minneapolis-based retailer reported Q2 adjusted earnings per share from continuing operations of $1.22, above the anticipated range, up 20.6 percent from $1.01 in 2014. Sales were in line with expectations, up 2.8 percent for the quarter.
"We’re very pleased with our second quarter financial results, as traffic growth, strong sales in our signature categories and continued expense discipline drove better-than-expected profitability,” said Brian Cornell, chairman and CEO of Target. “While the momentum in our financial results is encouraging, we have much more to accomplish. Looking ahead, we are focused on making further progress against our strategic priorities and are committed to improving operations as we move through the important back-to-school, back-to-college and holiday seasons.”
Q2 sales increased 2.8 percent to $17.4 billion from $17 billion last year, reflecting a 2.4 percent increase in comparable sales combined with sales from new stores. Digital channel sales grew 30 percent and contributed 0.6 percentage points to comparable sales growth. Segment earnings before interest expense and income taxes (EBIT) were $1,350 million in Q2 2015, an increase of 17.5 percent from $1,149 million in 2014.
During Q2, the company repurchased 8.2 million shares of common stock at an average price of $81.94, for a total investment of $675 million. Year to date, the company has repurchased 15.2 million shares at an average price of $81.41, for a total investment of $1.2 billion.
Target's discontinued operations update
Target Canada Co. completed a court-approved real estate sales process during the second quarter. Consistent with expectations, after-tax losses from discontinued operations were $20 million in Q2 2015, compared with $157 million last year. Q2 losses from discontinued operations include an increase to the company’s accrual for estimated probable losses, primarily guarantees of leases, and adjustments to the tax benefit from the investment loss in Canada.