In March last year, Target execs outlined a huge two-year cost savings target of about $2 billion. On Wednesday, Target executive vice president and CFO Cathy Smith told TheStreet the company is on track to meet that goal.
On a call with analysts later on, Smith said Target is "delivering upon" the cost savings target it outlined in March. The savings are being reinvested into enhancing the online shopping experience, and in the bricks-and-mortar stores -- for example by the addition of attendants in the cosmetics section that help walk consumers through the purchase.
"We will always continue to improve, there is always more to come," Smith said to TheStreet on opportunities to save even more in 2016. Target declined to comment on where the cost savings came from last year.
But, according to Target's guidance in March, the savings have come from operations, technology and process improvements, supply chain and sourcing efficiencies and corporate restructuring, most notably about 2,500 layoffs at the company's Minneapolis-based headquarters from February to June.
Target's expected cost savings likely played a part in the retailer offering better than expected 2016 profit guidance. The company expects full year earnings of $5.20 to $5.40 a share compared to Wall Street estimates for $5.17 a share. Also embedded in the profit outlook? A ton of share repurchases.
According to Smith, the earnings guidance "assumes a consistent levels of share repurchases" in 2016, conceding that it could be "higher." In 2015, Target repurchased 44.7 million shares of its stock for $3.4 billion. Under its current $10 billion share repurchase program, Target has spent about $6.6 billion to buy back 94.6 million shares.
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