- Target revised its FY adjusted EPS forecast to $8.30 – $8.90, down from the previous forecast of $9 – $9.70, and below the analyst estimate of $9.57.
- For the fourth quarter, Target projects adjusted EPS between $1.85 and $2.45, below the analyst estimate of $2.65.
- In the third quarter, Target reported a slight increase in comparable sales at +0.3%, which underperforms the estimate of +1.48%, but significantly improved from the previous year’s -4.9%.
- Digital sales growth was strong at +10.8%, surpassing the estimate of +4.69%.
- Total sales reached $25.23 billion, a +0.9% year-over-year increase, but below the estimate of $25.74 billion.
- The third quarter gross margin was 27.2%, falling short of the estimated 28.7%.
- Target’s EBIT was $1.20 billion, down 11% year-over-year.
- EBITDA totaled $1.95 billion, a 5.5% decrease from the previous year, and below the estimate of $2.16 billion.
- Customer transactions increased by 2.4%, while the average transaction amount decreased by 2%, more than the estimated decline of 1.08%.
- Digital sales constitute 18.5% of total sales for the third quarter.
- There are 1,978 Target stores, slightly higher than the estimate of 1,972.
- Operational challenges are indicated by an operating margin of 4.6%, below the estimate of 5.63%.
- Store comparable sales declined by 1.9%, as opposed to the estimated increase of 1.49%.
- Sales originating from stores compose 81.5% of total sales, compared to the estimated 82.7%.
- Third-quarter adjusted EPS stood at $1.85, compared to $2.10 in the previous year and an estimate of $2.30.
- Operating income was $1.17 billion, down 11% from the previous year and below the estimate of $1.46 billion.
- For the fourth quarter, Target expects comparable sales to remain approximately flat.
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Target Corp on Smartkarma
Analysts on Smartkarma are closely monitoring Target Corp, with reports from top independent analysts providing valuable insights on the company’s performance and future prospects.
Baptista Research delves into Target Corporation’s financial health, leadership transitions, and consumer engagements to evaluate potential price influences in the near future. Using a Discounted Cash Flow methodology, they offer a detailed analysis of the company’s promising dynamics and areas of susceptibility.
Meanwhile, Value Investors Club highlights Target’s ability to navigate challenges in the consumer landscape, driving positive sales growth through strategic inventory management and focus on growing categories. Despite softer trends in certain categories, Target’s resilience and profitability are underscored in the reports.
A look at Target Corp Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 4 | |
| Growth | 3 | |
| Resilience | 2 | |
| Momentum | 4 | |
| OVERALL SMART SCORE | 3.0 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Target Corp‘s overall long-term outlook, as reflected by the Smartkarma Smart Scores, shows a mixed picture. While scoring high in Dividend and Momentum at 4 each, indicating strong performance in these areas, the company lags in Value and Resilience, scoring 2 in both categories. Growth scores a 3, positioning Target with moderate growth potential. This suggests that investors may find the company attractive for its dividend yield and momentum, but should be cautious of its value and resilience factors.
Target Corporation, a retail giant operating general merchandise discount stores, primarily focuses on merchandising operations, including general merchandise, food discount stores, and a robust online business. Additionally, Target provides credit through its own branded proprietary credit cards to eligible customers. With its diversified retail approach and online presence, Target holds promise for sustained growth, underpinned by its well-established position in the retail industry.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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