During 2006, the company will continue its growth, adding 110 new stores and three distribution centers to serve the new units. The first cycle, beginning in March, will include 24 general merchandising stores and one SuperTarget.
Douglas A. Scovanner, executive vice president and CFO, added that Target in 2006 expects to "invest in a group of new high-quality stores which in total will add 8% net to our square footage." The company also expects to achieve a 4% to 6% increase in same store sales for the coming year.
During its Q4, the discount retailer posted earnings of $939 million, or $1.06 per share, for the fourth quarter ended Jan. 28, 2006, compared with $809 million, or 90 cents per share, in the same quarter a year ago. Fourth quarter revenues were $16.95 billion, up 11.5% from $15.19 billion in the same period a year ago. Comparable store sales for the quarter rose 4.2%.
The company's gross margin rate improved slightly from the prior year, while the retailer's expense rate performance was "unfavorable." Execs said the lower-than-anticipated rate was due to several factors including lower transition services income from discontinued operations and a planned retiming of advertising expense from earlier in the year.
The company also noted that in June 2004, Target execs announced a $3-billion share repurchase program. In November 2005, the company's board increased the share repurchase authorization by $2 billion to an aggregate $5 billion program. Under this program, the company repurchased $300 million of its common stock during the fourth quarter of 2005, acquiring 5.5 million shares at an average price of $54.41 per share.
For the full year, earnings from continuing operations were $2.408 billion, or $2.71 per share, in 2005, compared with $1.885 billion, or $2.07 per share, in 2004. Total revenues in 2005 increased 12.3% to $52.62 billion from $46.84 billion in 2004. The positive results were driven by a 5.6% increase in comparable store sales, as well as new store expansion and Target's credit card operations.
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