Target department store on June 07, 2022 in Miami, Florida. Target announced that profits will take a short-term hit, as a mark down of shadow items, cancel orders and take aggressive steps to get rid of extra inventory.
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Target on Tuesday will report holiday quarter results, as retailers prepare for a year that looks set to bring slower sales and price-conscious customers.
Here’s what analysts expect for Target’s fiscal fourth quarter, according to consensus estimates from Refinitiv:
- Adjusted earnings per share: $1.40 expected
- Revenue: $30.7 billion expected
The big-box retailer, known for selling cheaper but trendy clothes, home goods and more, saw a surge in sales during the first two years of the pandemic. Total annual revenue increased by about $28 billion – or about 36% – from fiscal 2019 to 2021.
But over the past year, Target has seen a shift in sales trends and market sentiment. Discounts has become the industry’s poster child for inventory problems, profit margins and concerns about inflation, middle-income consumers. The company has missed Wall Street’s earnings expectations for three consecutive quarters and warned investors to expect soft holiday sales.
Target stock is down nearly 40% from its all-time closing high. It closed Friday at $166.81 per share, bringing its market value to nearly $77 billion. So far this year, its shares are up about 12%, outpacing the nearly 4% gain in the S&P 500.
In addition to its fiscal fourth-quarter results, Target is expected to share its full-year guidance at an investor day in New York City.
So far, retailers have offered a cautious outlook for the year ahead. Walmart said last week that he expects retail sales to rise between 2% and 2.5% excluding fuel for US business, with growth coming from inflation rather than an increase in unit volume. elsewhere, Home Depot missed revenue expectations for the first time since November 2019 and said it expects annual sales growth to be roughly flat.
Target is more vulnerable than archrival Walmart. Groceries make up just 20% of Target’s sales, while Walmart gets more than half of its sales from the frequency-driving category. It’s also known as “Target runs,” or trips that inspire shoppers to fill their baskets with items they can buy and make impulse buys along with the items they’re headed to the store for – habits that won’t stop when consumers return to a more regular schedule. busy, spend money in restaurants and other services and keep a close eye on their budget.
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