Retail giant Target Corp (TGT) on Thursday saw its stock plummet 5.3% to as low as $66.53 after posting its sales of November-December period, updating on FY 2018 guidance, and announcing the change of its Chief Financial Officer.
Target announced that it expects comparable sales in the fourth quarter of 2018 to grow by about 5%. For the full year 2018, the company continues to expect adjusted earnings of $5.30-5.50 per share and GAAP EPS between $5.41 to $5.61.
For the combined November-December period, Target said that comparable sales grew 5.7%. This was higher than the 3.4% growth posting in the same period a year ago.
Comparable digital sales soared 29% in the two-month period. Target estimates 2018 to be the fifth consecutive year in which digital sales improved more than 25%.
CEO Brian Cornell weighed in, “Given our fourth quarter outlook, we are on track to deliver Target’s strongest full-year comparable sales growth since 2005, market-share gains across all of our core merchandising categories, and double digit growth in Adjusted EPS. In 2019, we expect to build on this momentum as we gain further scale in our fulfillment capabilities and deliver profitable growth throughout the year.”
CFO CATHY SMITH RETIRES
Target also announced that Chief Financial Officer Cathy Smith would be retiring from the company. Since her replacement is yet to be named, Target said that Smith would continue in her role as CFO till the process is complete, and then move to an advisory role until May 2020 to ensure a smooth transition.
Apart from Cathy, Target also announced other changes. Chief HR Officer Stephanie Lundquist was named the President of Food and Beverage. In this new role, Lundquist will oversee all merchandising and operations for Food and Beverage, including strategy development and implementation. Melissa Kremer, Senior Vice President HR, would be the new Chief HR Officer.
Communications SVP Katie Boylan was been named Chief Communications Officer, and she would report to the CEO.
REVISITING THE THIRD QUARTER
In the previously reported quarter, Target stock saw a battering after missing earnings estimates. The company had then reported a 5.1% growth in comp sales, which also fell below the market consensus of 5.2%.
Despite severe setbacks due to the lowering shareholder confidence, Target has remained optimistic about the holiday quarter. But as it anticipates comp sales growth of about 5%, the Street seems to be pushing for Target to buckle up and show some real change in its results. If it fails to surprise in its fourth-quarter results, the stock might see further sliding.