Target Shares Take A Bath As Q3 Profit Misses Estimates


Target Corp (NYSE: TGT)

Target reported mixed third-quarter earnings on Tuesday with profit falling short, while revenue hardly topped expectations of Wall Street analysts.

The retailer said costs of maintaining its workforce and investments in its supply chain weighed on earnings during the 13-week period to November 3, 2018. However, the company stuck to its full-year outlook saying it is better positioned for the holiday season than ever before.

Shares of the company, which ended Monday’s regular session at $77.79, were down $8.54, or 10.98% to $69.25 in Tuesday premarket trading. The stock had gained as much as 18% this year through Monday and given away 7.4% in the past three months.

TGT Earnings & Outlook

The company posted earnings of $622 million, or $1.17 per share, compared with $478 million, or $0.87 per share, in the earlier year period. Earnings, adjusted for one-time items came to $1.09 per share, missing Wall Street estimates by 2 cents.

Revenue was $17.82 billion, up 5.6% year over year, and ahead of analyst expectations of $17.80 billion. Comparable sales (sales at stores open for at least 12 months) grew 5.1% falling short of estimates of a 5.5% growth. Gross margin dropped from 29.6% to 28.7% due to rising supply chain costs.

For the current quarter, Target views comparable sales growth of 5%, which is below analysts’ estimate of a 4.4% rise. The company also projects that full-year adjusted earnings will be in the range of $5.41 to $5.61 per share, while analysts expect adjusted earnings of $5.41 per share.

Target CEO Comments

Brian Cornell, chairman and chief executive officer of Target Corp. commented,  “Our team delivered another outstanding quarter, driving comparable traffic and sales growth of more than 5 percent and earnings per share growth of more than 20 percent. We’ve made significant investments in our team heading into the holidays and they are ready to serve our guests with a comprehensive suite of convenient delivery and pickup options, a wide range of new products and unique gift ideas and a strong emphasis on low prices and great value.”

“We plan to leverage our current momentum into 2019, when we’ll achieve greater scale across the full slate of our initiatives – creating efficiencies and cost-savings, further strengthening our guest experience and positioning Target for profitable growth in the years ahead.”

Target Corp. Company Profile

Target Corp. engages in owning and operating of general merchandise stores. It also operates SuperTarget stores with a line of food and general merchandise items and offers an assortment of general merchandise, including many items found in the company’s stores and a complementary assortment, such as extended sizes and colors, sold only online.

The company was founded by George Draper Dayton in 1902 and is headquartered in Minneapolis, MN. – CNN Money