Target tops estimates after revamping product lineup

• Target Corp. topped first-quarter earnings estimates after refining its product lineup, a sign chief executive Brian Cornell is getting the retail chain back on track following years of missteps, including an ill-fated expansion into Canada.

Excluding some items, earnings amounted to US$1.10 a share in the period. Analysts had predicted US$1.02 on average, according to data compiled by Bloomberg News.

Cornell, a former PepsiCo Inc. executive who took the reins at Target last August, has been sprucing up U.S. stores after abandoning the chain’s money-losing Canadian operations in January. He’s also enticing shoppers with exclusive merchandise, such as the Lilly Pulitzer collection, and getting them to spend more when they visit stores. Health items and kids products sold especially well last quarter, the company said.

The goal is to use its unique lineup to get back Target’s former cachet, from the time when it was called “Tar-zhay” with a mock French accent, said Brian Yarbrough, an analyst at Edward Jones.

“That’s the place Target can differentiate itself from WalMart and Amazon,” he said. “That will get them back to the old days.”

Revenue increased 2.8 per cent in the first quarter to US$17.1 billion. Comparablestore sales, which measure established locations, rose 2.3 per cent, matching projections.

In January, Target announced it was walking away from Canada less than two years after opening stores there. Dismantling operations in the Canadian division, which employed 17,600 people, led to a US$5.1 billion writedown in the fourth quarter. The Canada unit had amassed more than US$2 billion in operating losses since 2011.

Target also suffered a costly data breach during the holiday season of 2013.