Targetsend mixed messages about their willingness to spend.
The discounter, which saw enormous sales gains during the Covid pandemic, is trying to bounce back from a disappointing past year. Profits got hit by excess inventory, higher markdowns and weaker demand for discretionary merchandise.
The company told investors in late May that its sales trends weakened that month. It said it expects a low single-digit decrease in comparable sales in the second quarter. For the full fiscal year, it anticipates comparable sales will range from a low single-digit decline to a low single-digit increase.
Here’s what analysts are expecting for the fiscal second quarter, according to Refinitiv consensus estimates:
Earnings per share: $1.39Revenue: $25.16 billion
Target may be vulnerable to disappointing investors this quarter. Unlike rival Walmart,leans more heavily on categories like clothing, home goods and electronics — items that households have stopped buying as frequently while paying more for food and necessities. Groceries account for only about 20% of its annual revenue.
Target also faced backlash in late May over its collection of merchandise celebrating Pride month. It pulled some items from the collection after threats to employees. The retailer drew criticism both from those who opposed Target’s decision to carry the items, which it has done for years with little backlash, and those who questioned the move to take them off shelves.
Yet some other retail metrics work in Target’s favor.
Retail sales for July were better than expected, according to fresh data from the Commerce Department on Tuesday. Home Depotposted declining sales, but topped Wall Street’s earning expectations and spoke of a more resilient consumer. And Amazon
Shares of Target closed at $125.05 on Tuesday. The company’s stock has dropped 16% year to date, trailing far behind the 15% gain of the S&P 500.
This story is developing. Please check back for updates.
