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Target's (TGT) Q4 Earnings Likely to Gain on Digital Strength
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Target Corporation’s (TGT - Free Report) fourth-quarter fiscal 2020 results, which are scheduled to release on Mar 2, are likely to reflect strength in digital sales. In fact, the company recently posted sturdy holiday sales for the November-December 2020 period, which reflect robust digital numbers.
Consumers’ increased preference for online shopping, especially amid the pandemic-led social distancing, has been working well for the company. To this end, Target’s focus on enhancing digital capabilities and expanding same-day fulfillment options has surely been a driver. In fact, several other retailers like Walmart (WMT - Free Report) , Dollar General (DG - Free Report) and Costco (COST - Free Report) have been accelerating digital investments, given the increasing demand for online shopping.
Solid Holiday Sales
Target informed that comparable sales in the combined November/December period increased 17.2%, backed by a 12.3% increase in average ticket as consumers consolidated trips. While store-originated comparable sales rose 4.2%, comparable digital sales soared 102% driven primarily by the company's same-day fulfillment services. Markedly, this general merchandise retailer continued to gain market share in all five of its core merchandising categories owing to robust demand. The company registered strongest growth in the Home category.
Incidentally, Home registered comparable-sales growth in the low-20% range during the November/December period. Comparable sales in Hardlines also grew in the low-20% range, reflecting a mid-20% gain in Electronics. In Food & Beverage, comparable sales growth was in line with the company average, while Beauty & Essentials registered an increase in the low teens. Apparel posted comparable sales growth in the high-single-digit range.
Certainly, Target has been gaining from its efforts to offer a unique shopping experience with safe and convenient options such as contactless Drive Up and Order Pickup, and same-day delivery with Shipt. In the holiday results release, the company informed that stores fulfilled more than 95% of the company’s sales in the November/December period. Same-day fulfillment services (Order Pick Up, Drive Up and Shipt) skyrocketed 193%. While sales fulfilled by Shipt grew more than 300% year over year, sales through Drive-Up were up more than 500%.
Target Corporation Price, Consensus and EPS Surprise
Target’s focus on enhancing omnichannel capacities, remodeling stores and expanding same-day delivery options is noteworthy. That being said, the impact of costs associated with digital fulfillment, the supply chain and COVID-related expenses cannot be ruled out. We note that costs related to additional employee payments and benefits, and investments undertaken to preserve the safety and health of customers and team members amid the coronavirus crisis might have weighed on margins.
How Are Estimates Trending?
The Zacks Consensus Estimate for Target’s fourth-quarter revenues is pegged at $27,513 million, indicating an increase of 17.6% from the prior-year quarter’s reported figure. The consensus mark for earnings has increased 2.8% over the past seven days to $2.54 per share. The figure suggests a surge of 50.3% from the year-ago period. Notably, the company has a trailing four-quarter earnings surprise of 52.4%, on average. In the last reported quarter, this Minneapolis, MN-based company's bottom line surpassed the Zacks Consensus Estimate by a significant margin.
The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond. Click here to download this report FREE >>
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Target's (TGT) Q4 Earnings Likely to Gain on Digital Strength
Target Corporation’s (TGT - Free Report) fourth-quarter fiscal 2020 results, which are scheduled to release on Mar 2, are likely to reflect strength in digital sales. In fact, the company recently posted sturdy holiday sales for the November-December 2020 period, which reflect robust digital numbers.
Consumers’ increased preference for online shopping, especially amid the pandemic-led social distancing, has been working well for the company. To this end, Target’s focus on enhancing digital capabilities and expanding same-day fulfillment options has surely been a driver. In fact, several other retailers like Walmart (WMT - Free Report) , Dollar General (DG - Free Report) and Costco (COST - Free Report) have been accelerating digital investments, given the increasing demand for online shopping.
Solid Holiday Sales
Target informed that comparable sales in the combined November/December period increased 17.2%, backed by a 12.3% increase in average ticket as consumers consolidated trips. While store-originated comparable sales rose 4.2%, comparable digital sales soared 102% driven primarily by the company's same-day fulfillment services. Markedly, this general merchandise retailer continued to gain market share in all five of its core merchandising categories owing to robust demand. The company registered strongest growth in the Home category.
Incidentally, Home registered comparable-sales growth in the low-20% range during the November/December period. Comparable sales in Hardlines also grew in the low-20% range, reflecting a mid-20% gain in Electronics. In Food & Beverage, comparable sales growth was in line with the company average, while Beauty & Essentials registered an increase in the low teens. Apparel posted comparable sales growth in the high-single-digit range.
Certainly, Target has been gaining from its efforts to offer a unique shopping experience with safe and convenient options such as contactless Drive Up and Order Pickup, and same-day delivery with Shipt. In the holiday results release, the company informed that stores fulfilled more than 95% of the company’s sales in the November/December period. Same-day fulfillment services (Order Pick Up, Drive Up and Shipt) skyrocketed 193%. While sales fulfilled by Shipt grew more than 300% year over year, sales through Drive-Up were up more than 500%.
Target Corporation Price, Consensus and EPS Surprise
Target Corporation price-consensus-eps-surprise-chart | Target Corporation Quote
Other Trends
Target’s focus on enhancing omnichannel capacities, remodeling stores and expanding same-day delivery options is noteworthy. That being said, the impact of costs associated with digital fulfillment, the supply chain and COVID-related expenses cannot be ruled out. We note that costs related to additional employee payments and benefits, and investments undertaken to preserve the safety and health of customers and team members amid the coronavirus crisis might have weighed on margins.
How Are Estimates Trending?
The Zacks Consensus Estimate for Target’s fourth-quarter revenues is pegged at $27,513 million, indicating an increase of 17.6% from the prior-year quarter’s reported figure. The consensus mark for earnings has increased 2.8% over the past seven days to $2.54 per share. The figure suggests a surge of 50.3% from the year-ago period. Notably, the company has a trailing four-quarter earnings surprise of 52.4%, on average. In the last reported quarter, this Minneapolis, MN-based company's bottom line surpassed the Zacks Consensus Estimate by a significant margin.
The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Target currently has an Earnings ESP of +2.66% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>