A Target store is seen in Manhattan, New York, on March 5, 2024.
Spencer Platt | Getty Images
Target will report quarterly earnings on Wednesday as the retailer tries to bounce back from a prolonged period of weaker sales and profits.
Here’s what Wall Street expects for the Minneapolis-based retailer, according to a survey of LSEG analysts:
- Earnings per share: $2.18
- Annuity: $25.21 billion
Target, known for its wide selection of trendy yet inexpensive 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 in the past four quarters. The industry metric, also called same-store sales, eliminates the effect of individual factors such as store openings and closings.
But Target executives 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 moved to try to increase sales and drive traffic. It announced in May that it would cut prices on about 5,000 frequently purchased products, including diapers, milk and paper towels. The company relaunched the loyalty program earlier this year and introduced a new paid membership, Target Circle 360, which includes perks like free same-day deliveries. Target also held its own sales event in July to compete Amazon‘s Prime Day.
Back to school is also a big time for the retailer, as it’s a time when families are typically looking for new shoes, clothes, backpacks, notebooks and more.
There are other indicators that could bode well for Target. Consumer spending strengthened more than expected in July, with advanced retail sales rising 1% from the previous month, according to the US Commerce Department.
Big box competitor Walmart Last week it beat Wall Street expectations for its own quarter and allayed fears that consumer health has deteriorated. Chief Financial Officer John David Rainey told CNBC that customers “remain selective, demanding [and] value-seeking,” but added, “we don’t see any additional harm to consumer health.”
However, Target’s sales mix looks different than Walmart’s. Only 23 percent of Target’s revenue comes from groceries, compared with about 60 percent for Walmart’s U.S. operations, according to the companies’ most recent annual filings.
Additionally, 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 may choose Walmart’s stores and website over other retailers such as Target.
Shares of Target closed Tuesday at $144.33. As of Tuesday’s close, the company’s stock is up about 1% so far this year. That’s behind the S&P 500’s roughly 17% gain over the same period.
