TGT: Clean Beat. Quick Read...

05/20/09 08:49AM EDT

Quick look here.  Looks like a clean $0.09 beat, coming in at $0.69 vs. Street at $0.60.  Remember TGT raised expectations with April sales from $0.52.   Core retail performance key here, with gross margins flat (despite sizeable mix shift from consumables) and slight sg&a leverage on a negative 3.7% comp.  It may have taken TGT a bit longer to exhibit controls and discipline vs. WMT and others but the results are bearing fruit here.  Overall EBIT % was flat y/y in core retail. 

Credit looked to be in line with expectations, but a huge drag y/y and the key reason why EPS are still down y/y.  Things don't appear to be getting worse which is key. 

Call at 10:30 here.  This is a big beat for a big company.  Makes me wonder (again) why the board needs to be shaken up...

Eric Levine

Research Edge

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