Ever since Target (TGT 1.03%) officially acknowledged the second-largest theft of credit and debit card data in U.S. history on Dec. 19, the company has taken center stage. Nearly every website, newspaper, and television show has covered the historic hack, which impacted an estimated 40 million customers. Despite all of the recent media coverage the iconic retailer has been getting, however, these five things about Target may take you by surprise.
1. Target is an international business
For the most part, Target is a domestic enterprise. The company has 1,797 U.S. locations in 49 states and the District of Columbia, and in the most recent third quarter generated 98% of its $17.26 billion in revenue through its U.S. segment. The other 2% of revenue ($333 million) was generated by Target's 124 Canadian locations.
Back in January 2011, Target made its first move outside of the U.S. when it acquired 220 Zellers department store locations from the Hudson's Bay Company for $1.8 billion. By the end of 2013, Target will have opened 124 of these locations, with the remaining 96 expected to open in the next couple of years.
So far, Target's Canadian adventure isn't going so well. In the third quarter, the segment reported an operating loss of $238 million. Industry analysts are now warning that the operation may not start making money until 2015 or even later.
What is the reason for such failure? Apparently, Target was not able to maintain its famous low prices up north. Furthermore, problems with its new supply chain often left locations with bare shelves. Nevertheless, Target executives still believe that they can generate $6 billion in sales by 2017 in their Canadian segment and that success in Canada can be used as a stepping stone for further international expansion, possibly into Mexico.
2. Target is the third-largest retailer in the U.S., and is soon to be fourth
One of the most-commonly misunderstood things about Target is that it is the third largest U.S. retailer, not second. When you think of the two biggest U.S. retailers you usually think of Wal-Mart (WMT 0.46%) as no. 1 and then Target as no. 2, but you would be wrong. Based on 2012 annual sales, the ranking goes: Wal-Mart ($328 billion), Kroger (KR 1.80%) ($92 billion), and then Target ($72 billion.)
Costco (COST -0.24%), no. 4 on the list, lost to Target by less than a billion dollars last year. It is projected to overtake Target in 2013 annual sales, however, which would send Target down to no. 4.
3. Target and Wal-Mart opened their first stores in the same year
It may be hard to believe, but two of the largest retailers in the world both opened their doors to business in 1962.
On May 1, the first ever Target store was opened in Roseville, Minnesota. Two months later, on July 2, the first ever Wal-Mart was opened in Rogers, Arkansas.
51 years and billions of customers later, Target and Wal-Mart are both still hanging in there. In 2012, the two combined to generate more than half a trillion dollars in revenue (Wal-Mart: $469 billion, Target: $72 billion).
4. Target has grown its dividend twice times as fast as Wal-Mart over the past decade
Wal-Mart is often credited as having one of the most-reliable, fastest-growing dividends in the entire stock market. While I don't want to downplay Wal-Mart's fantastic accomplishment, Target has been putting Wal-Mart to shame over the past decade. Over this time period, Target has grown its dividend 514.3%, which is nearly double Wal-Mart's 261.5% growth.
TGT Dividend data by YCharts.
5. Target is a Twitter expert
Target has over a million followers on Twitter: 1,012,944 followers as of last count. To put that into perspective, that is more than double the 437,709 followers Wal-Mart has, more than 21 times the 48,002 followers Kroger has, and more than 50 times the 19,930 followers Costco has.
In this ever-competitive retail environment, this social media savvy could hold incredible value. It could help the company to retain customers and grow brand loyalty, two extremely important things.
The Foolish conclusion
The recent revelations surrounding Target has sent some investors into panic mode. If one is able to look past the short-term worries, however, they will find a fundamentally solid company simply caught in the wrong place at the wrong time.
Target will bounce back from its recent slip up, but until then the market will punish the stock. This will give long-term investors an opportunity to scoop up shares at a discount. At the end of the day, the company will still pump out low-to-mid single digit revenue growth and a 3% dividend for the next couple of years. While it may not be the most exciting stock, it is a proven winner.
