On March 5, 2024, a Target store is seen in Manhattan, New York City.
Spencer Platt |
Goal will report its quarterly results on Wednesday as the retailer tries to get back on its feet after a prolonged period of weaker sales and profits.
Here are Wall Street's expectations for the Minneapolis-based retailer, according to an analyst survey conducted by LSEG:
- Earnings per share: $2.18
- Revenue: 25.21 billion US dollars
Target, known for its wide range of trendy but reasonably priced goods, has suffered during the crisis as consumers buy fewer high-value items such as new clothes or home accessories while spending more on everyday expenses such as food and housing. The company's comparable sales have declined over the past four quarters. The industry metric, also known as same-store sales, excludes the impact of one-time factors such as store openings and closings.
Still, Target officials 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 between flat and up 2%, and adjusted earnings per share would be between $8.60 and $9.60.
Target has taken steps to boost sales and attract more customers. In May, the company announced it would reduce prices on about 5,000 commonly purchased items, including diapers, milk and paper towels. Earlier this year, the company relaunched its loyalty program and introduced a new paid membership, Target Circle 360, that includes perks like free same-day delivery. Target also held its own sales event in July to compete with the other retailers. Amazon's Prime Day.
Back-to-school season is also an important time of year for the retailer, as families typically purchase new shoes, clothing, backpacks, notebooks and more during this time.
There are other indicators that could bode well for Target. Consumer spending was stronger than expected in July. According to the U.S. Department of Commerce, retail sales rose 1 percent in July compared to the previous month.
Big-box competitor Walmart last week beat Wall Street expectations for its own quarter, shrugging off fears that consumer health had worsened. Chief Financial Officer John David Rainey told CNBC that customers “remain picky and demanding.” [and] Value-seeking,” but added: “We see no additional impact on consumer health.”
But Target's revenue mix is different from Walmart's. Only 23 percent of Target's revenue comes from grocery, compared to about 60 percent at Walmart in the U.S., according to the two companies' most recent financial statements.
In addition, Walmart's quarterly results could put Target at risk. On a conference call last week, Rainey said Walmart's market share gains come primarily from high-income households – customers who may prefer Walmart's stores and website to other retailers like Target.
Target shares closed at $144.33 on Tuesday. Through Tuesday's close, the company's stock has risen about 1 percent so far this year, lagging the S&P 500's gain of about 17 percent over the same period.
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