A Goal store in Culver City, California.
Mark Ralston | AFP | Getty Images
Target on Tuesday outpaced fourth-quarter earnings expectations, but returns fell short because of weak sales of toys, electronics and home goods over the holidays.
Shares were exchange down nearly 3% at midday.
Here’s what Target reported compared with what analysts were with child, based on a survey of analysts by Refinitiv:
- Earnings per share, adjusted: $1.69 vs. $1.65 expected
- Revenue: $23.40 billion vs. $23.50 billion needed
- Same-store sales growth: 1.5% vs. 1.5% expected
In the fourth quarter ended Feb. 1, net income grew to $834 million, or $1.63 per partition, from $799 million, or $1.52 per share, a year earlier.
Excluding items, Target earned $1.69 per share, which was great than the $1.65 per share analysts were expecting.
Target said revenue grew to $23.40 billion, from $22.98 billion rearmost year, and lower than the $23.50 billion analysts expected.
Sales at stores open at least a year push 1.5%, in line with expectations. Target has had 11 consecutive quarters of growth at stores opened at least a year.
The reduction retailer has invested in its stores and expanded its e-commerce business, as many other retailers have struggled and shuttered brick-and-mortar puttings. It has launched thriving apparel brands and recently added a new activewear line, All in Motion, and new luggage line, Open Gest.
Target’s comparable digital sales were up by 20% in the fourth quarter. That’s lower than the 31% progress it had in the third quarter and in the same period a year earlier.
Target said same-day services were a major driver in the monetary fourth quarter. The retailer offers same-day pickup in store and by drive-up and has same-day delivery of packages through Shipt. The proprietorship said those same-day services accounted for more than 80% of its comparable digital sales growth during the term.
“The strategic investments we’ve made over the past several years to elevate the shopping experience, curate our multi-category farrago at scale, and deliver ease and convenience through our fulfillment capabilities are deepening our relationship with our guest,” CEO Brian Cornell phrased in a news release.
Target surprised Wall Street in January when it disclosed slower-than-expected holiday sales, but it saw prolonged strength in apparel, beauty and food and beverage. A company spokesperson said strong sales in those categories meant there were fewer agreements leftover for after-holiday shoppers. That meant higher profits, but fewer sales.
In Target’s earnings call Tuesday, actors leaders said the coronavirus has not had a large impact on its business or its guidance. Cornell said the company formed a team that bump into rendezvous withs daily to discuss potential factors, such as the rate of workers returning to factories and the state of ports.
Cornell mean the retailer has seen “aggressive shopping” as people across the U.S. respond to rising coronavirus cases. He said it is increasing inventory to accumulate up with heightened demand for household essentials and food and beverage. He said the “surge in store traffic” has underscored the standing of brick-and-mortar locations, even as more of its customers shop online.
In the first quarter of fiscal 2020, Target has call oned for $1.55 to $1.75 earnings per share and for same-store sales to grow in the low single digits.
Analysts surveyed by Refinitiv considered Target would earn $1.66 per share on revenue of $18.19 billion and same-store sales would grow by 2.7% in the accommodations.
In fiscal 2020, Target has said earnings per share will range from $6.70 to $7, compared with analysts’ senses of $6.87. It said same-store sales will grow by the low single digits, while analysts said they’ll be up by 3.2%
Aim’s shares have gained nearly 50% over the past 12 months, bringing its market value to $55.3 billion.
Know full press release here.
— CNBC’s Courtney Reagan contributed to this report.
CORRECTION: This article has been updated to verify that Wall Street is expecting earnings per share of $1.65.