Despite Earnings Beat, Target Faces Challenges Going Forward

May 20th, 2016 by Trefis Team
-0.64%
Downside
132
Market
131
Trefis
TGT: Target logo
TGT
Target

Target (NYSE:TGT) announced mixed results for the first quarter on Wednesday. The company reported revenues of $16.2 billion during the quarter, which missed Reuters’ compiled consensus estimates by roughly $120 million and were also short of the $17.1 billion reported last year. The sales decline of 5.4% was Target’s slowest growth since 2014. Target still managed to report adjusted earnings of $1.29 per share in the first quarter, more than 16% ahead of the $1.10 reported in the prior year quarter and easily beating the higher end of its own guidance.

Comparable-store sales increased 1.2% in this quarter but the gain was more than offset by sale of its pharmacy business to CVS last year.  Though digital sales have risen as compared to last year, retailers are still struggling to improve foot traffic to boost their net sales.

tgtearnings1

Relevant Articles
  1. Shifting Targets: Are These Two Stocks A Better Bet Than TGT?
  2. Why Did Target Stock Jump 10%?
  3. With The Stock Almost Flat This Year, Will Q2 Results Drive Target’s Stock Higher?
  4. Is Amazon Stock A Better Retail Pick Over Target?
  5. Gaining 12% Year To Date, Will Q1 Results Drive Target’s Stock Higher?
  6. TGT Stock Up 21% YTD, What’s Next?

 

tgtearnings5

Target also announced guidance for the second quarter that was lower than what analysts were expecting due to a slowdown in consumer demand.

tgtearnings6

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Target
Interactive Institutional Research (Powered by Trefis):

Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap |More Trefis Research