...Strong Competitive Position: The Issuer Default Rating reflects Target Corporation's (Target) strong competitive position in the discount retail sector and steady but softer performance from its U.S. business. Target's U.S. comparable store sales (comps) were up a modest 1.3% in 2014 after declining by 0.4% in 2013, reflecting the still-challenging environment facing low- and middle-income consumers and a lackluster merchandise offering. Transactions were negative 2.7% and 0.2%, respectively, in 2013 and 2014. Canadian Exit Positive: Target completed its exit from Canada, closing its remaining stores during April 2015. Cash costs associated with exiting the business are expected to total $500 million¡$600 million. The disposition of this business is a credit positive, as it will result in the elimination of significant operating losses, with Canadian EBITDA of negative $635 million in the 12 months ended Nov. 1, 2014, and capital lease obligations that totaled around $1 billion. Focus on...
