Target on Wednesday topped Wall Street’s earnings expectations, even as the discounter’s sales barely grew year-over-year and its shoppers bought more necessities.
Shares were choppy in premarket trading as investors processed the report and the company’s second-quarter guidance. Target said it expects sales to remain sluggish in the current quarter, marked by a low single-digit decrease in comparable sales.
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The big-box retailer stuck with its full-year outlook. It expects comparable sales will range from a low single-digit decline to a low single-digit increase for the fiscal year. Target said its full-year adjusted earnings per share will range between $7.75 and $8.75.
Even as customers buy fewer discretionary items, Target is drawing them to stores with groceries, everyday essentials and on-trend items, CEO Brian Cornell said on a call with reporters.
Here’s what Target reported for the three-month period that ended April 29, compared with Refinitiv consensus estimates:
- Earnings per share: $2.05 vs. $1.76 expected
- Revenue: $25.32 billion vs. $25.29 billion
Target’s net income in the quarter dropped to $950 million, or $2.05 per share, from $1.01 billion, or $2.16 per share, a year earlier.
Total revenue rose nearly 1% from $25.17 billion a year ago, coming in just above analysts’ expectations.
Comparable sales, a key retail metric that tracks sales at stores open at least 13 months and online, were about flat in the first quarter compared with the year-ago period. That was about in line with Wall Street’s expectations of 0.2% growth, according to Street Account estimates.
As customers bought different items, they shopped differently, too. Comparable store sales grew 0.7%, but comparable digital sales declined by 3.4% versus the year-ago period.
Cornell said a decrease in packages shipped to homes in part drove the weaker digital sales. Those deliveries skew toward discretionary items, compared with Target’s same-day curbside pickup…
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