Target on Tuesday topped Wall Street’s earnings expectations for the first time in a year, as its holiday-quarter sales rose roughly 1% from the same period a year prior.
Still, the big-box retailer revealed shrinking profit and margins and gave a conservative full-year outlook, saying customers are tossing fewer discretionary items into their shopping carts.
The company said it expects that comparable sales, a key metric that tracks sales at stores open at least 13 months and online, will range from a low single-digit decline to a low single-digit increase for fiscal 2023. Target said it expects full-year earnings per share of between $7.75 to $8.75. That was below Wall Street’s expectations of $9.23 per share, according to StreetAccount estimates.
CEO Brian Cornell said in a release the company performed well, despite “a very challenging environment,” with groceries, beauty items and household essentials lifting sales as consumers focused on necessities.
Cornell will share more of Target’s plans for the year at an investor day in New York City later Tuesday morning.
Shares of Target were up almost 5% in premarket trading Tuesday.
Here’s what the company reported for its fiscal fourth quarter that ended Jan. 28, compared with Refinitiv consensus estimates:
- Earnings per share: $1.89 vs. $1.40 expected
- Revenue: $31.4 billion vs. $30.72 billion expected
Though the company beat on the top and bottom lines, it cleared a bar that had been substantially lowered in recent months.
The big-box retailer, known for its lower-priced, but fashion-forward clothing, home goods and more, saw sales spike during the first two years of the pandemic. Its annual total revenue has grown by about $31 billion – or nearly 40% – from fiscal 2019 to 2022.
Yet over the past year, Target has faced a shift in both sales trends and market sentiment. The discounter became a poster child in the industry for inventory troubles, squeezed profit margins and concerns about inflation-pinched,…
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