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Target's (TGT) Q1 Earnings Coming Up: What's in Store?
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Target Corporation (TGT - Free Report) is likely to report a marginal increase in the top line when it reports first-quarter fiscal 2023 results on May 17, before market open. The Zacks Consensus Estimate for revenues is pegged at $25.37 billion, indicating a small rise of 0.8% from the prior-year reported figure.
The bottom line of this general merchandise retailer is anticipated to have declined year over year. The Zacks Consensus Estimate for earnings per share for the quarter under review has declined by a couple of cents to $1.75 over the past seven days. The consensus mark suggests a sharp decline from earnings of $2.19 reported in the year-ago period.
We expect revenues to be down 0.3% year over year to $25,102.6 million and the bottom line to decline 26.2% to $1.62 per share.
Target has a trailing four-quarter negative earnings surprise of 16.1%, on average. In the last reported quarter, this Minneapolis, MN-based company’s bottom line outperformed the Zacks Consensus Estimate by 36%.
Key Things to Note
Consumer spending activity has somewhat slowed down. This is because inflation and recession-wary shoppers have curtailed spending. Underlying price pressure and a higher interest rate environment have squeezed consumers’ disposable income, compelling them to rein in discretionary spending. Target might have witnessed soft demand for discretionary products, partly offset by sustained strength in essentials.
On its last earnings call, management guided a low-single-digit decline to low-single-digit growth in comparable sales for the first quarter. We expect a 0.5% decline in comparable sales in the quarter under discussion.
Target Corporation Price, Consensus and EPS Surprise
We believe that higher clearance and promotional markdown rates as well as higher net merchandise costs might have weighed on margins. Target projected first-quarter fiscal 2023 operating margin rate between 4% and 5%, down from 5.3% reported in the year-ago quarter. Target foresees first-quarter SG&A expense rate to be about one percentage point higher than a year-ago period. As a result, it guided adjusted earnings per share in the band of $1.50-$1.90, down from $2.19 per share posted in the prior-year period.
Nonetheless, management has been undertaking cost-control measures, such as working with vendors and driving continued operational efficiencies. The company’s digital endeavors, store investments and merchandise actions to gain market share are expected to have aided its performance.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Target this time. 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, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Target has an Earnings ESP of +0.40% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are three other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Walmart (WMT - Free Report) currently has an Earnings ESP of +1.16% and a Zacks Rank #3. The company’s bottom line is expected to increase when it reports first-quarter fiscal 2023 results. The Zacks Consensus Estimate for the quarterly earnings per share is pegged at $1.31, which suggest a marginal increase of 0.8% from the year-ago period.
Walmart’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $148.7 billion, which suggests a rise of 5% from the figure reported in the prior-year quarter. WMT delivered an earnings beat of 6.5%, on average, in the trailing four quarters.
Urban Outfitters (URBN - Free Report) currently has an Earnings ESP of +2.27% and a Zacks Rank #3. The company is likely to register an increase in the bottom line when it reports first-quarter fiscal 2024 results. The Zacks Consensus Estimate for quarterly earnings per share of 37 cents suggests an increase of 12.1% from the year-ago quarter.
Urban Outfitters’ top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.09 billion, which suggests a rise of 3.9% from the figure reported in the prior-year quarter.
American Eagle Outfitters (AEO - Free Report) currently has an Earnings ESP of +7.46% and a Zacks Rank #3. The company is likely to register a bottom-line increase when it reports first-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of 17 cents suggests an increase of 6.3% from the year-ago quarter.
American Eagle Outfitters’ top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.06 billion, which indicates a marginal increase of 0.9% from the figure reported in the prior-year quarter. American Eagle Outfitters has a trailing four-quarter earnings surprise of 0.9%, on average.
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Target's (TGT) Q1 Earnings Coming Up: What's in Store?
Target Corporation (TGT - Free Report) is likely to report a marginal increase in the top line when it reports first-quarter fiscal 2023 results on May 17, before market open. The Zacks Consensus Estimate for revenues is pegged at $25.37 billion, indicating a small rise of 0.8% from the prior-year reported figure.
The bottom line of this general merchandise retailer is anticipated to have declined year over year. The Zacks Consensus Estimate for earnings per share for the quarter under review has declined by a couple of cents to $1.75 over the past seven days. The consensus mark suggests a sharp decline from earnings of $2.19 reported in the year-ago period.
We expect revenues to be down 0.3% year over year to $25,102.6 million and the bottom line to decline 26.2% to $1.62 per share.
Target has a trailing four-quarter negative earnings surprise of 16.1%, on average. In the last reported quarter, this Minneapolis, MN-based company’s bottom line outperformed the Zacks Consensus Estimate by 36%.
Key Things to Note
Consumer spending activity has somewhat slowed down. This is because inflation and recession-wary shoppers have curtailed spending. Underlying price pressure and a higher interest rate environment have squeezed consumers’ disposable income, compelling them to rein in discretionary spending. Target might have witnessed soft demand for discretionary products, partly offset by sustained strength in essentials.
On its last earnings call, management guided a low-single-digit decline to low-single-digit growth in comparable sales for the first quarter. We expect a 0.5% decline in comparable sales in the quarter under discussion.
Target Corporation Price, Consensus and EPS Surprise
Target Corporation price-consensus-eps-surprise-chart | Target Corporation Quote
We believe that higher clearance and promotional markdown rates as well as higher net merchandise costs might have weighed on margins. Target projected first-quarter fiscal 2023 operating margin rate between 4% and 5%, down from 5.3% reported in the year-ago quarter. Target foresees first-quarter SG&A expense rate to be about one percentage point higher than a year-ago period. As a result, it guided adjusted earnings per share in the band of $1.50-$1.90, down from $2.19 per share posted in the prior-year period.
Nonetheless, management has been undertaking cost-control measures, such as working with vendors and driving continued operational efficiencies. The company’s digital endeavors, store investments and merchandise actions to gain market share are expected to have aided its performance.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Target this time. 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, which is the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Target has an Earnings ESP of +0.40% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are three other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Walmart (WMT - Free Report) currently has an Earnings ESP of +1.16% and a Zacks Rank #3. The company’s bottom line is expected to increase when it reports first-quarter fiscal 2023 results. The Zacks Consensus Estimate for the quarterly earnings per share is pegged at $1.31, which suggest a marginal increase of 0.8% from the year-ago period.
Walmart’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $148.7 billion, which suggests a rise of 5% from the figure reported in the prior-year quarter. WMT delivered an earnings beat of 6.5%, on average, in the trailing four quarters.
Urban Outfitters (URBN - Free Report) currently has an Earnings ESP of +2.27% and a Zacks Rank #3. The company is likely to register an increase in the bottom line when it reports first-quarter fiscal 2024 results. The Zacks Consensus Estimate for quarterly earnings per share of 37 cents suggests an increase of 12.1% from the year-ago quarter.
Urban Outfitters’ top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.09 billion, which suggests a rise of 3.9% from the figure reported in the prior-year quarter.
American Eagle Outfitters (AEO - Free Report) currently has an Earnings ESP of +7.46% and a Zacks Rank #3. The company is likely to register a bottom-line increase when it reports first-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of 17 cents suggests an increase of 6.3% from the year-ago quarter.
American Eagle Outfitters’ top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.06 billion, which indicates a marginal increase of 0.9% from the figure reported in the prior-year quarter. American Eagle Outfitters has a trailing four-quarter earnings surprise of 0.9%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.