What to expect when Target (TGT) reports its Q3 2024 earnings results

Shares of Target Corporation (NYSE: TGT) stayed green on Thursday. The stock has gained 9% over the past three months. The retailer is scheduled to report its earnings results for the third quarter of 2024 on Wednesday, November 20, before market open. Here’s a look at what to expect from the earnings report:

Revenue

Analysts are projecting revenue of $25.9 billion for Target in Q3 2024, which would represent a growth of around 2% year-over-year. In the second quarter of 2024, revenues of $25.5 billion were up around 3% YoY.

Earnings

Target has guided for adjusted earnings of $2.10-2.40 per share for Q3 2024. Analysts are predicting EPS of $2.30. This compares to adjusted EPS of $2.10 reported in Q3 2023 and $2.57 reported in Q2 2024.

Points to note

Target expects a 0-2% increase in comparable sales for the third quarter of 2024. In Q2, comparable sales increased 2%, reflecting a 0.7% growth in comparable store sales and an 8.7% increase in comparable digital sales. Comp growth was mainly driven by a rise in traffic.

Against an inflationary backdrop, budget-conscious consumers are constantly looking for value. Target’s multi-category assortment and its value-focused price reductions on essential items position it well to cater to the needs of these customers. It is likely to have helped drive traffic growth in the third quarter.

The company has been seeing strength in the frequency category along with improvements in the discretionary category, particularly apparel and beauty. These trends may have continued into the third quarter as well.

TGT is seeing momentum in its Target Circle loyalty platform, which had over 100 million members as of its last earnings call. The company added more than 2 million new members to this platform in Q2.

Target is also seeing continued growth in its same-day services, led by Drive Up and Target Circle 360, both of which saw growth in the low teens last quarter. Same-day services account for over two-thirds of the company’s digital sales, with Drive Up being the largest contributor, generating sales of over $2 billion in Q2. This strength is expected to continue in the third quarter as well.