Categories Analysis, Earnings, Retail

Target stock dips after announcing 2018 outlook, CFO change

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.

Also Read:  American Eagle Outfitters (AEO) Earnings: 2Q20 Key Numbers

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%.

Target third quarter 2018 Earnings Infographic

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.

 

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

Most Popular

COVID-19 drove retailers up the digital path years ahead than anticipated

Earlier we looked into how, during the COVID-19 pandemic, retailers saw changing trends in terms of their assortments and how the acceleration of online shopping led many of them to

Snowflake (SNOW) creates a record as the most successful software IPO ever; stock more than doubles

Data is at the heart of business innovation. Recognizing this trend, companies are seeking ways to transform their businesses by capturing, analyzing, and mobilizing data. The public cloud is becoming

Adobe (ADBE) sees new tailwinds as virtual shift gathers steam

The second half has been highly rewarding for design software maker Adobe Inc. (NASDAQ: ADBE) amid stable demand for digital content solutions. The company has remained unaffected by the virus-related

Top