by Brian Lipton
Target’s Martinsburg, VA location

Minneapolis-based Target Corporation reported its first quarter results for fiscal year 2017. The national retailer’s GAAP earnings per share from continuing operations were $1.22, compared with $1.02 in first quarter 2016 (which included $261 million of pre-tax early debt retirement losses); however, it posted adjusted earnings per share of $1.21, down 6.1 percent from $1.29 in 2016. First quarter 2017 sales decreased 1.1 percent to $16.0 billion from $16.2 billion last year, reflecting a comparable sales decline of 1.3 percent, partially offset by the contribution from new stores. Digital channel sales grew 22 percent.

“Target’s first quarter financial performance was better than our expectations, reflecting strong execution by our team as they delivered for our guests in a very choppy environment. After starting the quarter with very soft trends, we saw improvement later in the quarter, particularly in March,” said Brian Cornell, chairman and CEO of Target. “We are in the early stage of a multi-year effort to position Target for profitable, consistent long-term growth, and while we are confident in our plans, we are facing multiple headwinds in the current landscape. As a result, we will continue to plan our business prudently while preparing our team to chase business when we have an opportunity.”

Looking ahead to the second quarter of 2017, Target expects a low single digit decline in comparable sales, and an adjusted EPS of $0.95 to $1.15. For full-year 2017, the retailer continues to expect a low single digit decline in comparable sale; it did not update its full year guidance for adjusted EPS, but acknowledged that better-than-expected first quarter performance increases the probability that it will finish the year above the midpoint of its prior guidance.