Categories Earnings, Retail

Target shares plunge 7% after Q3 earnings miss

Target Corp (TGT) stock plunged 7% after missing earnings estimate in the third quarter. Net income rose 20% to $1.09 cents per share, lower than the average analysts’ estimate of $1.11 per share. Higher investments to improve supply chain efficiency hurt Target’s margins during the quarter.

On a GAAP basis, net income rose to $1.17 per share, compared to $0.87 per share during the same period last year.

Target third quarter 2018 Earnings Infographic

The company reported 5.1% growth in comp sales driven by healthy increases in both store and digital channels. However, this came slightly below the Street consensus of 5.2%. Thanks to the increasing investments in the digital platform, comparable online sales jumped 49% in Q3.

Revenue of the department store chain rose 5.6% to $17.8 billion. Analysts had expected revenue of $17.75 billion during the quarter.

Target CEO Brian Cornell said, “We’ve made significant investments in our team heading into the holidays and they are ready to serve our guests with a comprehensive suite of convenient delivery and pickup options, a wide range of new products and unique gift ideas and a strong emphasis on low prices and great value.”

Why Target is a better investment than Walmart this holiday season

Despite the earnings miss, Target remains optimistic about the holiday quarter, when it anticipates comp sales growth of about 5%. The company also reiterated its guidance for full-year adjusted EPS between $5.30 and $5.50.

Target shares have increased 15% so far this year.

During the prior-sequential quarter (Q2), a 6.4% jump in store traffic had driven Target’s top line higher by 7%. Earnings grew 19% riding on the sales growth and lower income taxes. The results had also benefited from various merchandising strategies including cost-savings initiatives and efforts to improve pricing and promotions.

 

Get access to timely and accurate verbatim transcripts that are published within hours of the event.

Most Popular

IPO Alert: Here’s what to look for when CaliberCos goes public

The massive slowdown in the IPO market continued in the second half as the challenges posed by high inflation and interest rate hikes weighed on investor confidence. Meanwhile, there is

CarMax (KMX) Stock: Does the current dip offer a buying opportunity?

The automotive sector is one of the worst affected by the combination of high inflation and rising interest rates. Consumers have become more cautious and are prioritizing their purchases with

Ultimax Digital gears up for $10mln IPO. Here’s all you need to know

The IPO market has witnessed muted activity this year, and things don’t seem to have improved in the second half. The upcoming public listing of video game technology firm Ultimax

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