US retailer Target Corp. is to resume open-market purchases of its shares under the US$10bn programme authorised by its board of directors in November 2007.
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Target temporarily suspended all of its share buyback activity in November last year to protect liquidity and debt ratings in what the company said was “an exceptionally challenging environment”.
“Better results in both our retail and credit card segments, together with disciplined management of our capital expenditures and significant reductions in credit card receivables, have contributed to much stronger-than-expected cash flow generation,” said Gregg Steinhafel, Target chairman, president and CEO.
“We believe employing this internally-generated cash for share repurchase activity is an effective tool to maintain appropriate balance in our capital structure and will create value for our shareholders over time,” he added.
As of the end of third quarter 2009, Target has bought around 95.2m shares of its common stock under the current programme at an average price per share of $51.42. This activity represents a total investment of approximately $4.9bn, just under half of the current authorisation.
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By GlobalDataTarget said the pace of repurchase activity will depend on “many factors”, including the strength of its business operations, adequate liquidity and conditions in the debt and equity markets.
The firm added that it expects the remainder of the share repurchase programme to be completed within two to three years.
