On Tuesday, Target unveiled its fourth-quarter earnings, surpassing analysts’ estimates for the first time in a year. Its stock price increased by 1.10% to $168.50 a share on February 28. However, it is anticipated to decline by -0.22% to $168.13 apiece in the upcoming session.
The earnings per share of Target jumped to $1.89, exceeding experts’ $1.40 forecasts. In addition, it is higher than the previous $1.54 data. Likewise, its revenue improved to $31.40 billion, topping the $30.65 billion statistics and beating the prior $26.50 billion figures.
On the other hand, its net income for the period dropped by 43.00% to $876.00 million or $1.89 per share. It plummeted from the former $1.54 billion or $3.21 apiece a year ago. Also, Target showed a plunge in profit and margins, giving a low full-year outlook. The company said customers are purchasing fewer discretionary items.
According to CEO Brian Cornell, the company had a good performance despite facing a challenging environment. He added that sales are lifting in groceries, beauty items, and household essentials as shoppers focused more on necessities.
Currently, Target says that it looks forward to returning to its pre-pandemic rate of 6.00% starting in the next fiscal year or later. The entity mentioned that its recovery depends on the economic backdrop and consumer demand.
Weak Sales and Customer Traffic Expected by Target
On February 28, Target said it saw a slowdown in slates and customer traffic. Yet, it will spend between $4.00 billion and $5.00 billion to offer fresh merchandise and faster delivery.
As a result, the big-box retailer aims to launch or expand more than ten private-level brands. Also, it plans on opening around 20 new stores. It will offer drive-in delivery for shopping motorists who would not have to leave their vehicles.
Additionally, Target intends to remodel around 175 existing stores. Furthermore, it wants to expand a network of hubs to cheapen and quicken the process of getting online consumers orders.