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Target (TGT) to Report Q3 Earnings: Factors to Consider
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Target Corporation (TGT - Free Report) is likely to report a decline in the top line when it reports third-quarter fiscal 2023 results on Nov 15 before market open. The Zacks Consensus Estimate for revenues is pegged at $25,275 million, indicating a decrease of about 4.7% from the prior-year reported figure.
The bottom line of this general merchandise retailer is anticipated to have declined year over year. In the past seven days, the Zacks Consensus Estimate for earnings per share for the quarter under review has dropped by one cent to $1.47. This consensus figure suggests a 4.6% decrease compared to the earnings reported in the same period last year.
Target has a trailing four-quarter earnings surprise of 13.3%, on average. In the last reported quarter, this Minneapolis, MN-based company’s bottom line outperformed the Zacks Consensus Estimate by 27.7%.
Key Things to Note
Consumer spending, a key catalyst for the economy, has shown signs of slowing down. Several factors have come into play, including underlying inflationary pressure, a higher interest rate environment and reductions in pandemic savings. Target might have witnessed soft demand for discretionary products, partly offset by sustained strength in essentials.
The softness in second-quarter sales trends prompted Target to guide a mid-single-digit decline in comparable sales for the third quarter. Our projections align with this guidance. We anticipate a 5.3% decline in comparable sales for the quarter under consideration.
Compounding the challenge is the potential deleverage in SG&A expenses. We expect SG&A expenses to increase 4.6% year over year in the third quarter, with the SG&A expense rate anticipated to increase 200 basis points to 21.7%, directly influencing profit margins.
As a result, the bottom line is poised for a year-over-year decline, with Target providing guidance for adjusted earnings in the range of $1.20-$1.60 per share. The midpoint of this range, at $1.40, reflects a decrease from the earnings of $1.54 reported in the year-ago period.
Despite these challenges, Target's management has been proactive in implementing cost-control measures, collaborating with vendors and driving operational efficiencies. The company's strategic initiatives, including digital advancements, store investments and targeted merchandise actions to capture market share, are anticipated to have contributed positively to its overall performance.
Target Corporation Price, Consensus and EPS Surprise
Our proven model does not conclusively predict 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 odds of an earnings beat. However, that’s not the case here.
Target has an Earnings ESP of +3.09% but a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Costco (COST - Free Report) currently has an Earnings ESP of +4.26% and a Zacks Rank of 2. The company is likely to register an increase in the bottom line when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.43 suggests a rise of 10.7% from the year-ago reported number. You can see the complete list of today’s Zacks #1 Rank stocks here.
Costco’s top line is expected to ascend year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $57.69 billion, which calls for an increase of 6% from the prior-year quarter. COST has a trailing four-quarter earnings surprise of 2.1%, on average.
Ross Stores (ROST - Free Report) currently has an Earnings ESP of +2.08% and a Zacks Rank #2. The company is expected to register a bottom-line increase when it reports third-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of $1.21 suggests an increase of 21% from the year-ago quarter.
Ross Stores’ top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $4.83 billion, indicating an increase of 5.8% from the figure reported in the year-ago quarter. ROST has a trailing four-quarter earnings surprise of 11.4%, on average.
Walmart (WMT - Free Report) currently has an Earnings ESP of +0.63% and carries a Zacks Rank #2. The company’s bottom line is expected to increase marginally year over year when it reports third-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $1.51 suggests an increase of 0.7% from the year-ago quarter.
Walmart’s top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $159.2 billion, which indicates a rise of 4.2% from the figure reported in the prior-year quarter. WMT has a trailing four-quarter earnings surprise of 11.6%, on average.
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Target (TGT) to Report Q3 Earnings: Factors to Consider
Target Corporation (TGT - Free Report) is likely to report a decline in the top line when it reports third-quarter fiscal 2023 results on Nov 15 before market open. The Zacks Consensus Estimate for revenues is pegged at $25,275 million, indicating a decrease of about 4.7% from the prior-year reported figure.
The bottom line of this general merchandise retailer is anticipated to have declined year over year. In the past seven days, the Zacks Consensus Estimate for earnings per share for the quarter under review has dropped by one cent to $1.47. This consensus figure suggests a 4.6% decrease compared to the earnings reported in the same period last year.
Target has a trailing four-quarter earnings surprise of 13.3%, on average. In the last reported quarter, this Minneapolis, MN-based company’s bottom line outperformed the Zacks Consensus Estimate by 27.7%.
Key Things to Note
Consumer spending, a key catalyst for the economy, has shown signs of slowing down. Several factors have come into play, including underlying inflationary pressure, a higher interest rate environment and reductions in pandemic savings. Target might have witnessed soft demand for discretionary products, partly offset by sustained strength in essentials.
The softness in second-quarter sales trends prompted Target to guide a mid-single-digit decline in comparable sales for the third quarter. Our projections align with this guidance. We anticipate a 5.3% decline in comparable sales for the quarter under consideration.
Compounding the challenge is the potential deleverage in SG&A expenses. We expect SG&A expenses to increase 4.6% year over year in the third quarter, with the SG&A expense rate anticipated to increase 200 basis points to 21.7%, directly influencing profit margins.
As a result, the bottom line is poised for a year-over-year decline, with Target providing guidance for adjusted earnings in the range of $1.20-$1.60 per share. The midpoint of this range, at $1.40, reflects a decrease from the earnings of $1.54 reported in the year-ago period.
Despite these challenges, Target's management has been proactive in implementing cost-control measures, collaborating with vendors and driving operational efficiencies. The company's strategic initiatives, including digital advancements, store investments and targeted merchandise actions to capture market share, are anticipated to have contributed positively to its overall performance.
Target Corporation Price, Consensus and EPS Surprise
Target Corporation price-consensus-eps-surprise-chart | Target Corporation Quote
What the Zacks Model Unveils
Our proven model does not conclusively predict 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 odds of an earnings beat. However, that’s not the case here.
Target has an Earnings ESP of +3.09% but a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Costco (COST - Free Report) currently has an Earnings ESP of +4.26% and a Zacks Rank of 2. The company is likely to register an increase in the bottom line when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.43 suggests a rise of 10.7% from the year-ago reported number. You can see the complete list of today’s Zacks #1 Rank stocks here.
Costco’s top line is expected to ascend year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $57.69 billion, which calls for an increase of 6% from the prior-year quarter. COST has a trailing four-quarter earnings surprise of 2.1%, on average.
Ross Stores (ROST - Free Report) currently has an Earnings ESP of +2.08% and a Zacks Rank #2. The company is expected to register a bottom-line increase when it reports third-quarter fiscal 2023 results. The Zacks Consensus Estimate for quarterly earnings per share of $1.21 suggests an increase of 21% from the year-ago quarter.
Ross Stores’ top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $4.83 billion, indicating an increase of 5.8% from the figure reported in the year-ago quarter. ROST has a trailing four-quarter earnings surprise of 11.4%, on average.
Walmart (WMT - Free Report) currently has an Earnings ESP of +0.63% and carries a Zacks Rank #2. The company’s bottom line is expected to increase marginally year over year when it reports third-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $1.51 suggests an increase of 0.7% from the year-ago quarter.
Walmart’s top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $159.2 billion, which indicates a rise of 4.2% from the figure reported in the prior-year quarter. WMT has a trailing four-quarter earnings surprise of 11.6%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.