Target Reports Q4 and Full-Year 2016 Earnings

TargetTarget reported its fourth quarter and full-year 2016 results. Highlights include a GAAP earnings per share (EPS) from continuing operations of $1.46 in the fourth quarter and $4.58 for full-year 2016, compared to $2.31 and $5.25 in 2015, respectively. 

Fourth quarter 2016 sales decreased 4.3 percent to $20.7 billion from $21.6 billion last year, reflecting a 1.5 percent decline in comparable sales combined with the removal of pharmacy and clinic sales from this year’s results. Comparable digital channel sales grew 34 percent and contributed 1.8 percentage points of comparable sales growth. Segment earnings before interest expense and income taxes (EBIT), which is Target’s measure of segment profit, were $1,344 million in fourth quarter 2016, a decrease of 13.5 percent from $1,554 million in 2015.

Fourth quarter EBITDA and EBIT margin rates were 9.5 percent and 6.5 percent, respectively, compared with 9.8 percent and 7.2 percent, respectively, in 2015. Fourth quarter gross margin rate was 26.9 percent, compared with 27.9 percent in 2015, reflecting markdown pressure from promotional and clearance activity and costs associated with the mix shift between the company’s store and digital channels, partially offset by the benefit of the sale of the company’s pharmacy and clinic businesses, a favorable merchandise mix, and cost of goods savings. Fourth quarter SG&A expense rate was 17.5 percent in 2016, compared with 18.1 percent in 2015, reflecting the benefit of the sale of the company’s pharmacy and clinic businesses and continued expense discipline across the organization.

About the author

Maddie Michalik

Maddie Michalik

Maddie Michalik was the Editor-in-Chief of The Toy Book from 2020-2022. She was also a Senior Editor at The Toy Insider and The Pop Insider.

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