MINNEAPOLIS — Target Corp. here said last week its board has authorized a new $10 billion share repurchase program over the next three years.
The buyback will involve more than 20% of the company's outstanding shares, Doug Scovanner, executive vice president and chief financial officer, told analysts during a conference call.
Although it is a three-year program, he said Target expects to complete “half or more [of the buyback] by the end of 2008.”
In response to Target's announcement, Moody's Investor Service, New York, said it was placing the company's A1 long-term rating on review for possible downgrade, though any downgrade would be limited to one notch, a Moody's analyst said.
Target reported lower earnings and higher sales for the third quarter that ended Nov. 3, though earnings and sales were up for the year to date.
Net income for the three-month quarter fell 4.4% to $483 million, while total revenues rose 9.3% to $14.8 billion, and comparable-store sales climbed 3.7%, according to Target figures. For the nine-month period, net income increased 9.1% to $1.8 billion, while revenues were up 9.3% to $43.5 billion and comps rose 4.3%.
Bob Ulrich, chairman and chief executive officer, said Target experienced soft sales during the quarter in high-margin categories, particularly apparel, and “solid increases” in lower-margin categories, including consumables and its commodity business.