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Target Corp. swung to a fourth quarter profit, buoyed by gains from the sale of its pharmacy and clinic businesses and greater efficiencies that reduced its overhead expenses. Same store sales for the Minneapolis-based retailer increased 1.9 percent, driven by traffic growth of 1.3 percent. Digital channel sales increased an impressive 34 percent, contributing 1.3 percentage points to comparable sales growth.
For full-year 2015, Target’s comp sales grew 2.1 percent, while comparable traffic increased 1.3 percent.
“With traffic growing for five consecutive quarters and our signature [nonfood] categories of style, baby, kids and wellness leading our growth, Target’s results demonstrate that we are focused on the right strategic priorities,” said Brian Cornell, Target's chairman and CEO.
Cornell gave a special shout out to "our teams across the company, for giving our guests a great holiday season, driving consistent growth throughout the fourth quarter and delivering on the sales and profit goals we laid out at the beginning of the year. While we have made a great deal of progress in 2015, we are excited about the opportunity in front of us to provide a more seamless experience and accelerate profitable growth.”
As the company's turnaround efforts continue, fourth quarter 2015 sales decreased 0.6 percent to $21.6 billion from $21.8 billion last year.
Q4 EBITDA and EBIT margin rates were 9.8 percent and 7.2 percent, respectively, compared with 9.8 percent and 7.3 percent in 2014. In addition, Target's Q4 SG&A expense rate was 18 percent in 2015 vs. 18.6 percent in 2014, as investments in store labor were offset by continued expense discipline across the organization, according to the company.
Target returned $4.8 billion to shareholders in 2015 through dividends and share repurchases.