A Target department store on June 07, 2022 in Miami, Florida. Target said it expects earnings to suffer in the near term as it flags junk items, cancels orders and takes aggressive action to get rid of excess inventory.
Joe Raedle | Getty Images
Target Tuesday will release results for the holiday quarter, as retailers brace for a year that looks set to bring slower sales and more 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 low-cost but fashion-forward clothing, home goods and more, saw sales surge in the first two years of the pandemic. Its total annual revenue grew by about $28 billion — or about 36% — from fiscal year 2019 to 2021.
Yet over the past year, Target has had to contend with shifting sales trends and market sentiment. The discounter has become a star child in the industry for inventory issues, squeezed profit margins and worries about middle-income consumers pinched by inflation. The company has missed Wall Street earnings expectations for three straight quarters and warned investors to expect weak holiday sales.
Target’s stock is down nearly 40% from its all-time closing high. It closed Monday at $166.81 per share, bringing its market value to nearly $77 billion. So far this year, however, its shares are up about 12%, outpacing the nearly 4% rise in the S&P 500.
Along with its fiscal fourth quarter results, Target is expected to share its full-year guidance at an investor day in New York.
So far, retailers have presented a cautious outlook for the year ahead. walmart said last week that it expects same-store sales to grow between 2% and 2.5% excluding fuel for its U.S. business, with that growth coming from inflation rather than increased volume unitary. Somewhere else, Home deposit missed revenue expectations for the first time since November 2019 and said it expects full-year sales growth to be roughly flat.
Target is more vulnerable than its big rival Walmart. Groceries make up just 20% of Target’s sales, while Walmart derives more than half of its sales from the frequency category. It’s also well known for its “target errands,” or trips that entice shoppers to fill their baskets with discretionary and impulse-buy items with the item they went to the store for — a habit that may not stick. as consumers return to busier schedules, spend money on restaurants and other services and watch their budget more closely.
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