On Wednesday, Target will release its fiscal third-quarter earnings as the company looks to rebound from a run of underwhelming performance and well-publicized setbacks.
Aware of the critical holiday season ahead, investors will be alert to any indications that Target’s sales are improving.
Based on an analyst survey conducted by LSEG, formerly known as Refinitiv, Wall Street has the following expectations for the company for the next three months:
- Expected earnings per share: $1.48
- Revenue: Estimated at $25.24 billion
Retail sales have decreased as customers choose to spend their money on experiences rather than goods because they are uncomfortable with rising prices. However, Target has been hit especially hard because it offers a greater variety of apparel, housewares, and impulse buys than some of its competitors.
It has also had its share of difficulties. Target faced criticism for selling Pride Month merchandise—a collection of items honoring LGBTQ+ individuals and causes—that it has been selling for over ten years. Higher rates of organized retail crime took a toll on it. Additionally, it recently closed nine locations in significant cities, citing theft and violent threats as the reasons for the closures.
The Minneapolis-based business lowered its full-year projection in August, stating that it anticipated a mid-single-digit percentage decline in comparable sales and a range of $7 to $8 in earnings per share.
Target’s stock has declined due to flat sales. The company’s shares have lost more than half of their value since the peak of the Covid pandemic, and they have dropped by almost 26% this year.
Target CEO Brian Cornell stated that the company’s sales of discretionary goods have decreased for seven straight quarters, both in terms of dollars and units, in an earlier this month interview with Becky Quick. According to him, consumers are purchasing fewer toys, clothes, and even groceries.
However, he struck a positive note regarding the important holiday season. Sales have increased for the company around “seasonal moments,” like Mother’s Day, Halloween, and summer vacations, he said. This trend may be advantageous as Black Friday, Thanksgiving, and Christmas draw near.
Additionally encouraging was Home Depot’s quarterly report released on Tuesday. Although the home improvement retailer said the worst of inflation is over, it still forecasted year-over-year sales declines.
