A Target store in Manhattan, New York City, on March 5, 2024.
Spencer Platt | Getty Images
goal The US retail giant will report quarterly earnings on Wednesday in an attempt to bounce back from a long period of weak sales and profits.
Here’s what Wall Street expects from the Minneapolis-based retailer, according to a survey of analysts conducted by LSEG:
- Earnings per share: $2.18
- profit: $25.21 billion
Target, known for its wide range of trendy but low-priced merchandise, has been hurt as consumers buy fewer discretionary items like new clothes or home decor while paying more for everyday expenses like food and housing. The company’s comparable sales have declined over the past four quarters. The industry measure, also called same-store sales, strips out the impact of one-time factors like store openings and closings.
However, Target’s leaders said in May that the company was on track to return to sales growth in the second quarter. Target said full-year comparable sales would be flat to up 2%, and adjusted earnings per share would be between $8.60 and $9.60.
Target has been moving to try to boost sales and increase foot traffic. It announced in May that it would cut prices on about 5,000 frequently purchased products, including diapers, formula and paper towels. The company relaunched its loyalty program earlier this year and introduced a new paid membership, Target Circle 360, which includes perks like free same-day delivery. Target also held its own sales event in July to compete with AmazonPeak day.
Back-to-school season is also a big one for retailers, as it’s the time when families typically buy new shoes, clothes, backpacks, notebooks, and more.
There are other signs that could bode well for Target. Consumer spending came in stronger than expected in July, with advanced retail sales up 1% from the previous month, according to the U.S. Commerce Department.
big competitor Walmart Last week’s earnings beat Wall Street expectations for its quarter and brushed aside concerns about deteriorating consumer health. CFO John David Rainey told CNBC that customers “remain selective and discerning.” [and] “We do not see any additional harm to consumer health,” he added.
But Target’s sales mix appears to be different from Walmart’s. According to the companies’ most recent annual filings, just 23% of Target’s revenue comes from grocery, compared with about 60% of Walmart’s U.S. revenue.
Moreover, Walmart’s quarterly results could threaten Target. On an earnings call last week, Rainey said most of Walmart’s market share gains come from higher-income households — customers who might choose Walmart’s stores and website over other retailers, like Target.
Target shares closed Tuesday at $144.33. By Tuesday’s close, the company’s shares were up about 1% so far this year. That’s less than the S&P 500’s gain of about 17% over the same period.
