Categories Analysis, Retail

Target Earnings Preview: Traffic growth to drive Q3 results

Multi-brand retailer Target Corp. (TGT) is set to release its third-quarter results on Tuesday before the bell with store traffic growth is likely to dominate the top line growth. The comparable digital sales growth is expected to be driven by e-commerce expansion initiatives.

Analysts, on average, expect Target to report earnings of $1.12 per share on revenue of $17.78 billion for the third quarter. In comparison, during the previous year quarter, the company posted a profit of $0.91 per share on revenue of $16.67 billion. Majority of the analysts recommended a “hold” rating on the stock with a price target of $91.47 per share.

Since 2017, apart from remodeling its current stores and improving supply chain management, the company hopes to revamp its business model with the extension of small-format stores. Also, investors are optimistic about the company’s fast-growing store traffic and sales growth.

Earnings and sales are expected to jump by 15% and 5% respectively in the whole of 2018. With the holiday shopping season around the corner, an outlook update could cherish investors. Meanwhile, the company depends on its constant sales growth and proper management of costs and expenses to yield better profit growth for the year.

The store traffic is expected to rise considerably for the third quarter as the redesigned stores and competitive pricing have improved the shopping experience. The e-commerce platform will continue to give the desired result for the company in the highly competitive industry.

Target Q2 results top estimates amid record traffic growth; stock rallies

For the second quarter, the 6.4% increase in store traffic drove Target’s top line higher by 7%. The bottom line growth of 19% benefited from the sales growth and lower income taxes. The results also benefited from the merchandising strategies including cost savings initiatives and efforts to improve pricing and promotions.

For the full year 2018, the company had expected adjusted earnings in the range of $5.30 to $5.50 per share. For the year 2019, Target is expected to continue gaining market share in all of its core merchandise categories.

Shares of Target opened higher on Monday but turned negative in the early trade. The stock has risen over 20% in the year so far and over 35% in the past year.

 

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips.

Most Popular

United Parcel Service (UPS) seems on track to regain lost strength

Cargo giant United Parcel Service, Inc. (NYSE: UPS) ended fiscal 2023 on a weak note, reporting lower revenues and profit for the fourth quarter. The company experienced a slowdown post-pandemic

IPO Alert: What to look for when Boundless Bio goes public

Boundless Bio is preparing to debut on the Nasdaq stock market this week, and become the latest addition to the list of biotech firms that have launched IPOs this year.

Nike (NKE) bets on innovation and partnerships to return to high growth

Sneaker giant Nike, Inc. (NYSE: NKE) has been going through a rough patch for some time, with sales coming under pressure from weak demand and rising competition. Post-pandemic, the company

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top