Target aims at strengthening Share Buyback Program
Target Corp said in an announcement that it is looking forward to increase its share buyback program by double to $10 billion. It also wants to raise dividend by 7.7%. The revelation confirmed the contents of a statement published by the company previously and later taken off its website earlier on Tuesday.
The company had invested $3.7 billion through the first quarter of 2015, retiring 56.9 million shares under the buyback program. Also, it raised quarterly dividend to 56 cents per share from 52 cents in the prior quarter.
“Given our outlook for capital expenditures and the strong cash generation of our core business, we expect to have the capacity to increase our annual dividend and repurchase billions of dollars of Target shares annually while maintaining our current credit ratings”, said Target Chief Financial Officer John Mulligan in a statement.
The decision was taken during a board meeting organized on Tuesday evening. The decision came ahead of its annual shareholders' meeting in San Francisco the following day. But investors got to know about the decision on Tuesday as the company inadvertently posted its buyback and dividend plans on its website. The release was mistakenly posted during internal preparations for possible decisions out of the board meeting.
In the first quarter ended May 2, Target repurchased $562 million worth of its shares. This meant that the company resumed buybacks after nearly two years, showing a strong sign that the company has recovered from a damaging data breach in late 2013.