US retailer Target forecast profit for the current year that topped most analysts’ estimates as chief executive officer Brian Cornell laid out plans to improve the retailer’s merchandise and trim costs through job cuts.
Profit per share in the year through January will be $4.45 to $4.65, executives for the Minneapolis-based company said at a presentation to analysts in New York Tuesday. The average of 26 analysts’ estimates compiled by Bloomberg was $4.46.
Cornell, a former PepsiCo and Wal-Mart executive, took over at Target in August with the retailer at a crossroads. A hacker attack during the 2013 holidays hurt sales and a move into Canada had faltered, causing billions in losses. Cornell pulled out of Canada in January and is refocusing Target on key categories of merchandise to win back customers.
“We’re in the early stages of a shift in our business,” Cornell said in the presentation, his first major address to Wall Street. “We will be a brand that separates itself.”
To boost sales, special attention will be paid to improving Target’s baby, kids, wellness and grocery sections, Cornell said. The grocery revamp will entail improving assortments of granola, yogurt, candy, snacks, coffee and craft beers. Target also will accelerate the opening of smaller-format locations to cater to city-dwellers.
Longer term, Target plans to increase earnings per share by about 10 percent annually.
Bloomberg News, edited by ESM
