Stocks of the Target declined Following the Holidays

Target Jumps on Q4 Earnings Beat, Circle 360 Launch Hype

On Tuesday, Target Corporation’s shares rose after better-than-expected fourth-quarter earnings and anticipation for its Circle 360 membership.

The Minnesota-headquartered retailer’s stock soared 12.03% to $168.60 per share on March 05 following its latest earnings call. Nevertheless, industry experts predict short-term profit-taking to drive a 1.12% slide to $166.71 apiece in the coming market session.

Target posted Q4 earnings per share of $2.98 for its 2023 fiscal year, topping analysts’ estimates of $2.41 by 23.65%. The figure indicated growth of 57.67% year-over-year (YoY) from $1.89 in Q4 2022 and 41.90% quarter-over-quarter from $2.10 in August-October.

Similarly, its November-January revenue stood at $31.90 billion, a slight 0.22% higher than the projected $31.83 billion. It marked a 1.59% YoY increase from $31.40 billion in the same period a year prior and a 25.59% QoQ lift from $25.40 billion in the preceding quarter.

Moreover, the company’s operating income expanded by 58.33% YoY from $1.20 billion to $1.90 billion. In addition, Target rewarded investors with dividends of $508.00 million in the fourth quarter, 2.21% above last year’s $497.00 million.

For the first quarter of FY 2024, the mass-market retailer projects an EPS of $1.90, a 36.24% QoQ drop. However, it anticipates a 1.79% YoY climb in full-year EPS from $8.94 in 2023 to $9.10 in 2024.

Circle 360 to Help Target Compete with Amazon

Target CEO Brian Cornell said Circle 360 grants unlimited free same-day delivery for orders over $35.00 and free two-day shipping. It will cost $99.00 per year, but those who sign up from April 07 through May 18 will get a special price of $49.00 per year.

Furthermore, the lower price will always be available to the more than 100 million Target Circle credit card holders. Cornell added that members of the retailer’s credit card program spend over five times more than non-member customers.

The paid program was one of the highlights of the company’s annual investor meeting on February 28. It aims to rejuvenate sales and traffic in online and brick-and-mortar stores and attract dissatisfied Amazon Prime members.

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