On March 5, 2024, a Target store in Manhattan, New York.
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Target The retailer is due to report quarterly earnings on Wednesday as it attempts to recover from a prolonged period of weak sales and profits.
Here’s what Wall Street expects from the Minneapolis-based retailer, according to a survey of analysts by LSEG:
- Earnings per share: $2.18
- income: US$25.21 billion
Target is known for its wide selection of trendy but affordable merchandise, but as consumers buy fewer non-essential items like new clothing or home decor, they pay more for everyday expenses like food and housing. So hurt. The company’s comparable sales have declined over the past four quarters. The industry metric, also known as same-store sales, removes the impact of one-time factors such as store openings and closings.
However, Target leaders said in May that the company expected to return to sales growth in the second quarter. Target said full-year comparable sales will be flat to grow 2%, and adjusted earnings per share will be between $8.60 and $9.60.
Target has taken action to try to boost sales and increase foot traffic. In May, the company announced it would cut prices on about 5,000 frequently purchased items, including diapers, milk and paper towels. The company relaunched its loyalty program earlier this year and launched a new paid membership, Target Circle 360, which includes perks like free same-day shipping. Target is also hosting its own sales event in July to tie in with Amazon‘s prime day.
Back-to-school is also an important time for retailers, as it’s a time when families are typically scrambling to buy new shoes, clothes, backpacks, laptops and more.
There are other indicators that could bode well for Target. According to data from the U.S. Department of Commerce, consumer spending was stronger than expected in July, with early retail sales increasing 1% from the previous month.
large competitors Walmart Quarterly results last week beat Wall Street expectations, shrugging off concerns about worsening consumer health. Chief Financial Officer John David Rainey told CNBC that customers “remain selective, discerning (and) driven by value,” but added, “We’re not seeing any additional impact on consumer health.” damage.
However, Target’s sales mix looks different from Walmart’s. Only 23% of Target’s revenue comes from groceries, compared with about 60% of Walmart’s U.S. business, according to the company’s most recent annual report.
Additionally, Walmart’s quarterly results could threaten Target. On an earnings call last week, Rainey said most of Walmart’s share gains come from higher-income households, which are likely to choose Walmart’s stores and website over other retailers like Target.
Target shares closed at $144.33 on Tuesday. The company’s shares were up about 1% year to date as of Tuesday’s close. That lagged the S&P 500’s gain of about 17% during the same period.
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