It will cost Target $US5.1 billion to Canada.
On Wednesday, Target announced fourth quarter and fiscal-year 2014 results while the retailer gave another outlook on the costs it expects to incur as it exits operations in Canada.
Here’s Target’s breakdown its expected costs for exiting its Canada ops:
On January 14, 2015, following a comprehensive assessment of Canadian operations, Target’s Board of Directors approved a plan to discontinue operating stores in Canada. As a result of the decision, Target recorded a pretax impairment loss and other charges of $US(5,105) million in fourth quarter 2014. After-tax losses from discontinued operations were $US(3,600) million in fourth quarter, or $US(5.59) per share, and $US(4,085) million in full-year 2014, or $US(6.38) per share.
Back in January, Target announced that it would leave Canada. In that announcement, Target CEO Brian Cornell said:
“After a thorough review of our Canadian performance and careful consideration of the implications of all options, we were unable to find a realistic scenario that would get Target Canada to profitability until at least 2021.”
In its January announcement, Target estimated it would take charges of $US5.4 billion while exiting Canada.
As for its fourth quarter results, Target beat expectations on both the top and bottom lines.
Adjusted earnings per share came in at $US1.50 against estimates for $US1.46, while revenue totaled $US21.75 billion against expectations for $US21.62 billion.
On a same-store basis, sales at Target were up 3.8% compared to the prior.
In pre-market trade on Wednesday, Target shares were little changed.