Target will report earnings before Wednesday’s bell and shed light on consumer spending as prices rise on inflation and pre-pandemic spending like commuting, dining out and summer vacations return.
Here’s what Wall Street expects for the fiscal first quarter, according to consensus estimates from Refinitiv:
- Earnings per share: $3.07 expected
- Revenue: $24.49 billion expected
So far this week, retailers have sent mixed signals on consumer sentiment. Home Depot raised its full-year outlook and posted a strong first quarter as homeowners upgraded to premium products and hired professionals for projects. Walmart missed revenue as shoppers spent more on groceries and less on higher-margin purchases — some opting for cheaper brands or smaller sizes, such as B. Half gallons of milk.
Target has argued that it can sustain demand even as the war in Ukraine and inflation create uncertainty and consumers are on the move. At an investor day in March, the company shared its full-year outlook. The company expects revenue growth in the low to mid-single digits and adjusted earnings per share growth in the high single digits.
Compared to Walmart, Target’s sales come from a larger mix of merchandise. According to its annual report, about 20% of Target’s annual sales in fiscal 2021 came from food and beverages. Beauty and home items accounted for 26% of annual sales, and other key categories like apparel and accessories grew about 20% each. Walmart US, on the other hand, gets a little over half of its annual sales from groceries.
Target has partnered with well-known brands by opening mini-shops for Apple, Disney, and Ulta Beauty in its stores. It has also launched its own trendy but budget-friendly brands. This has helped the retailer attract new customers during the pandemic, including middle- and upper-income households who may be able to sustain spending even as food and gas prices soar.
As of Tuesday’s close, Target shares are down about 7% so far this year. Shares closed at $215.28 on Tuesday, down 1.41%. Target’s market value is $99.82 billion.
https://www.cnbc.com/2022/05/18/target-tgt-q1-2022-earnings.html Target (TGT) result Q1 2022