This excerpt taken from the TGT DEFA14A filed May 21, 2009.
4. RiskMetrics questions Targets strategy.
Target today announced earnings for the first quarter ended May 2, 2009. Target stated its belief that the improved stability and predictability in key aspects of both Targets retail and credit card segments reflect the resilience of Targets strategy and underscore the companys ability to generate substantial value for shareholders over time.
Targets long-term strategy has created one of the most successful retailers in the United States. Over the past 10 years ending January 31, 2009, Target has:
· Grown revenues at a compound annual rate of 11%, gaining substantial market share;
· Translated this top-line growth into increased profitability by expanding EBITDA margins by 200 basis points; and
· Grown EPS at an average annual rate of 14%.
This performance has translated into the companys stock price outperformance in relation to Wal-Mart and the S&P 500 on a ten-year(6), five-year(7) and year-to-date(8) basis.
The RiskMetrics report claims that RiskMetrics emphasizes long-term performance, but then goes on to focus on Targets performance over a selective short-term period and questions whether Target has the right strategy for all economic environments. We believe that Targets long-term performance, as well as its performance year to date and the earnings announced today, make clear that Targets strategy is the right one.