Target Corp | $TGT Stock | Shares Down 4.78% After Q4 Earnings Report


Target Corp (NYSE: TGT)


Shares of Target Corporation plunged 4.78% after the company failed to beat Wall Street’s estimates. Analysts were expecting that the retailer would report earnings per share (EPS) of $1.38, and $22.46 billion in revenues on Tuesday, March 6.

Instead, the company reported a lower adjusted $1.37 EPS, but managed to surpass analysts’ estimates by $300 million, after it posted $22.77 billion in revenues. The company also issued a not-so-positive guidance, stating that its EPS for the current quarter could be between $1.25 and $1.45 per share, with a lower single-digit sales increase.

TGT Earnings & Outlook

Target adjusted Q4 $1.37 EPS is a decline of 5.8% compared to prior-year period’s $1.45 EPS. Nonetheless, sales grew remarkably by more than 4% in January compared to last year’s holiday sales season, representing 3.6% growth for the fourth-quarter against prior year’s 1.4% decline. Gross profit was up 8.6% to $5,976 million, while operating income dropped 14.5% to $1,151 million.

The company has returned $590 million to its shareholders in 2017’s fourth quarter, including repurchasing shares valued at $254 million and paying $337 million in dividends. In the same period, Target still had about $3.71 billion left under its share buyback program of $5 billion.

Target’s CEO Comments

In a move aimed at trumping Walmart, Amazon and other competitors, the retailer recently announced it would increase the minimum wage for its employees to $12. On Tuesday, Brian Cornell, the company’s CEO also reiterated the company’s commitment to increase minimum wage up to $15 per hour by 2020, which will “establish Target as a company of choice.”

He said the company recorded significant spikes in job applications after raising its pay, and improving its employees’ environment. Analysts, however, expressed concerns that the retailer’s labor and remodels investments could limit its sales and earnings trends.

Target Corporation Company Profile

Target Corporation is an American retailer of general merchandise that was incorporated in 1902. It is head offices are in Minneapolis, Minnesota. The company sells products through its digital channels and stores.

It stocks an edited assortment of foods such as perishables, frozen items, dairy and dry grocery in its general merchandise stores. The retailer’s brands include Sutton & Dodge, Archer Farms, Knox Rose, Wine Cube, Market Pantry, Art Class, Boot & Barkley, Merona, Ava & Viv, Cat & Jack, Threshold, Room Essentials, Wondershop, Smith & Hawken, Spritz, Simply Balanced, Xhilaration, Embark, Sonia Kashuk and Gilligan & O’Malley.

Target also derives revenue from its amenities like Target Photo and Target Café and licensed or leased departments like Starbucks and Target Optical. Presently, the company has 1,802 stores in the US.

The competitors of Target include Walmart, Costco Wholesale Corporation, Amazon, Best Buy, Dollar General Corporation, Home Depot, CVS Health Corporation, Gap Inc, Kroger, Lowe’s Companies, Macy’s, Kohl’s Corporation, Publix Super Markets, Sears Holdings Corporation, Staples, Walgreens Boots Alliance, TJX Companies and Rite Aid Corporation. –ReferenceForBusiness