Target in Q4 loss on Canada exit, but sales top estimates

Minneapolis -- Target on Wednesday reported a net loss of $2.6 billion (pre-tax loss of $5.1 billion) in its fourth quarter due to the impact of its exit from Canada, compared to a $520 million gain year-ago period. However, the chain’s adjusted earnings came in at $1.50 per share, beating Wall Street estimates of $1.46 per share.



Target’s sales increased 4.1% to $21.8 billion, also better than expected, on increased store traffic and online growth. It was the chain’s best sales growth in three years.



Same-store sales rose 3.8%, also topping estimates. Digital channels contributed 0.9 percentage points to comparable sales growth.



"We're pleased with our fourth quarter financial results, which were driven by better-than-expected sales and particularly strong performance in our signature categories-style, baby, kids and wellness," stated CEO Brian Cornell. "We're seeing early momentum in our efforts to transform Target, and our team is entering the new fiscal year with a singular focus on continuing to differentiate our merchandise assortment and shopping experience while controlling costs by reducing complexity and simplifying the way we work."



Full-year 2014 sales increased 1.9% to $72.6 billion from $71.3 billion last year, with a 1.3% rise in same-store sales. Digital channel sales growth of more than 30% contributed 0.7 percentage points to 2014 comparable sales growth.



The company said it would provide a full year outlook when it hosts a meeting for investors on March 3.