Q1 2014 Earnings Call Transcript

Transcript Call Date 05/21/2014

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Target Corporation First Quarter Earnings Release Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will invite you to participate in a question-and-answer session. As a reminder, this conference is being recorded Wednesday, May 21st, 2014.

I would now like to turn the conference over to Mr. John Hulbert, Senior Director, Investor Communications. Please go ahead, sir.

John Hulbert - IR: Good morning, and thank you for joining us on our 2014 first quarter earnings conference call. On the line with me today are; John J. Mulligan, Interim President and Chief Executive Officer and Chief Financial Officer; and Kathee Tesija, Chief Merchandising and Supply Chain Officer.

This morning, John will provide a high-level summary of our first quarter results and strategic priorities for the remainder of the year. Then Kathee will discuss results in the U.S. and Canada, guest insights and plans for the second quarter and beyond. And finally, John will provide more detail on our financial performance along with our outlook for the second quarter and the full year. Following the remarks, we'll open the phone lines for a question-and-answer session.

As a reminder, we're joined on this conference call by investors and others who are listening to our comments via webcast. Following this conference call, John I will be available throughout the day to answer any follow-up questions you may have. Also, as a reminder, any forward-looking statements that we make this morning are subject to risks and uncertainties, the most important of which are described in our SEC filings.

Finally, in these remarks, we refer to adjusted earnings per share which is a non-GAAP financial measure. A reconciliation to our GAAP EPS is included in this morning's press release posted on our Investor Relations website.

With that, I'll turn it over to John for a review of the quarter and our priorities going forward. John?

John J. Mulligan - Interim President, CEO and CFO: Thanks John. First off today, I want to thank the Target team for their energy and commitment. The first quarter was unusually challenging as we worked hard to help our guests recover from the data breach. Because of the team's efforts, traffic and sales trends have improved substantially and we're in a much better position today than we were just three months ago.

Also, before I turn to the first quarter operating results, I want to briefly discuss the Board's recent announcement of Gregg Steinhafel's departure and the initiation of a comprehensive internal and external search for a permanent replacement. I want to thank Gregg for all his contributions to Target over his 35 year career and I am humbled to follow him into this world even on an interim basis.

With the full support of the Board, Kathee and I along with the rest of the leadership team have made it clear to the entire Target team that we're not going to wait for a permanent CEO to improve our operations and performance. We are already taking important steps including management changes announced yesterday to move the organization forward. This morning we reported adjusted earnings per share of $0.70, above the midpoint of our guidance. This is the result of generally in line performance in both the U.S. and Canada combined with a better than expected tax rate driven by a variety of small matters none of which was individually significant.

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