We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Target (TGT) Q4 Earnings Top Estimates, Comps Decline 4.4% Y/Y
Read MoreHide Full Article
Target Corporation (TGT - Free Report) came up with fourth-quarter fiscal 2023 results, wherein the top and bottom lines not only beat the respective Zacks Consensus Estimate but also improved year over year. Comparable sales and traffic trends have shown a sequential improvement for the second straight quarter.
Despite challenges, Target is poised to capture market share over time, driven by its compelling value proposition and a spectrum of initiatives. These encompass the expansion of new stores, innovations in brands, the enhancement of same-day services and the rollout of a new Target Circle membership program to drive traffic.
Sales & Earnings Picture
Target reported adjusted earnings of $2.98 per share, which surpassed the Zacks Consensus Estimate of $2.41. Markedly, the bottom line meaningfully increased from the earnings of $1.89 reported in the year-ago period.
The big-box retailer generated total revenues of $31,919 million, which increased 1.7% year over year. The metric came ahead of the Zacks Consensus Estimate of $31,837 million. We note that sales rose 1.6% to $31,467 million, while other revenues jumped 9.8% to $452 million.
Meanwhile, comparable sales decreased 4.4% in the fourth quarter, following a drop of 4.9% in the preceding quarter. The metric reflected a comparable store sales decline of 5.4% and a comparable digital sales decline of 0.7%. We had expected a comparable sales drop of 5% and a comparable store sales decline of 3.9% for the quarter under discussion.
Target Corporation Price, Consensus and EPS Surprise
The gross margin expanded 290 basis points to 25.6%, reflecting lower markdowns and other inventory-related costs, lower freight costs, lower supply chain and digital fulfillment costs and a favorable category mix. We had expected year-over-year improvements of 170 basis points in the gross margin for the quarter under review.
Concurrently, the operating margin rose to 5.8% from 3.7% in the corresponding period last year, surpassing our forecasted 90-basis point increase in the metric.
Other Financial Details
This Zacks Rank #2 (Buy) company ended the quarter with cash and cash equivalents of $3,805 million, long-term debt and other borrowings of $14,922 million and shareholders’ investment of $13,432 million. During the quarter, Target paid out dividends of $508 million.
Target did not buy back any shares during the quarter under review. At the end of the quarter, the company had about $9.7 billion remaining under the repurchase program approved in August 2021.
Outlook
Target anticipates a comparable sales decline of 3% to 5% in the first quarter of fiscal 2024. Both GAAP and adjusted earnings for the first quarter are expected to fall within the range of $1.70-$2.10 per share compared with 2.05 reported in the year-ago period.
For fiscal 2024, management foresees a slight uptick in comparable sales, ranging from flat to 2%. GAAP EPS and adjusted earnings for the fiscal year are projected in the band of $8.60-$9.60 per share compared with $8.94 reported in fiscal 2023.
We note that shares of Target have increased 5.7% year to date compared with the industry’s rise of 10.4%.
Other Stocks Hogging in the Limelight
Here, we have highlighted three other top-ranked stocks, namely Costco Wholesale Corporation (COST - Free Report) , Grocery Outlet Holding Corp. (GO - Free Report) and Vital Farms (VITL - Free Report) .
The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings suggests growth of around 4.7% and 6.5%, respectively, from the year-ago reported numbers.
Grocery Outlet, a high-growth, extreme-value retailer of quality, name-brand consumables and fresh products, currently carries a Zacks Rank #2. GO has a trailing four-quarter earnings surprise of 17%, on average.
The Zacks Consensus Estimate for Grocery Outlet’s current financial-year sales and earnings suggests growth of around 9.3% and 9.4%, respectively, from the year-ago reported numbers.
Vital Farms offers a range of ethically produced foods nationwide. It currently has a Zacks Rank #2. VITL has a trailing four-quarter earnings surprise of 145%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales suggests growth of 29% from the year-ago reported figure.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Target (TGT) Q4 Earnings Top Estimates, Comps Decline 4.4% Y/Y
Target Corporation (TGT - Free Report) came up with fourth-quarter fiscal 2023 results, wherein the top and bottom lines not only beat the respective Zacks Consensus Estimate but also improved year over year. Comparable sales and traffic trends have shown a sequential improvement for the second straight quarter.
Despite challenges, Target is poised to capture market share over time, driven by its compelling value proposition and a spectrum of initiatives. These encompass the expansion of new stores, innovations in brands, the enhancement of same-day services and the rollout of a new Target Circle membership program to drive traffic.
Sales & Earnings Picture
Target reported adjusted earnings of $2.98 per share, which surpassed the Zacks Consensus Estimate of $2.41. Markedly, the bottom line meaningfully increased from the earnings of $1.89 reported in the year-ago period.
The big-box retailer generated total revenues of $31,919 million, which increased 1.7% year over year. The metric came ahead of the Zacks Consensus Estimate of $31,837 million. We note that sales rose 1.6% to $31,467 million, while other revenues jumped 9.8% to $452 million.
Meanwhile, comparable sales decreased 4.4% in the fourth quarter, following a drop of 4.9% in the preceding quarter. The metric reflected a comparable store sales decline of 5.4% and a comparable digital sales decline of 0.7%. We had expected a comparable sales drop of 5% and a comparable store sales decline of 3.9% for the quarter under discussion.
Target Corporation Price, Consensus and EPS Surprise
Target Corporation price-consensus-eps-surprise-chart | Target Corporation Quote
Margins
The gross margin expanded 290 basis points to 25.6%, reflecting lower markdowns and other inventory-related costs, lower freight costs, lower supply chain and digital fulfillment costs and a favorable category mix. We had expected year-over-year improvements of 170 basis points in the gross margin for the quarter under review.
Concurrently, the operating margin rose to 5.8% from 3.7% in the corresponding period last year, surpassing our forecasted 90-basis point increase in the metric.
Other Financial Details
This Zacks Rank #2 (Buy) company ended the quarter with cash and cash equivalents of $3,805 million, long-term debt and other borrowings of $14,922 million and shareholders’ investment of $13,432 million. During the quarter, Target paid out dividends of $508 million.
Target did not buy back any shares during the quarter under review. At the end of the quarter, the company had about $9.7 billion remaining under the repurchase program approved in August 2021.
Outlook
Target anticipates a comparable sales decline of 3% to 5% in the first quarter of fiscal 2024. Both GAAP and adjusted earnings for the first quarter are expected to fall within the range of $1.70-$2.10 per share compared with 2.05 reported in the year-ago period.
For fiscal 2024, management foresees a slight uptick in comparable sales, ranging from flat to 2%. GAAP EPS and adjusted earnings for the fiscal year are projected in the band of $8.60-$9.60 per share compared with $8.94 reported in fiscal 2023.
We note that shares of Target have increased 5.7% year to date compared with the industry’s rise of 10.4%.
Other Stocks Hogging in the Limelight
Here, we have highlighted three other top-ranked stocks, namely Costco Wholesale Corporation (COST - Free Report) , Grocery Outlet Holding Corp. (GO - Free Report) and Vital Farms (VITL - Free Report) .
Costco Wholesale Corporation, which operates membership warehouses, currently carries a Zacks Rank #2. COST has a trailing four-quarter earnings surprise of 2.6%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings suggests growth of around 4.7% and 6.5%, respectively, from the year-ago reported numbers.
Grocery Outlet, a high-growth, extreme-value retailer of quality, name-brand consumables and fresh products, currently carries a Zacks Rank #2. GO has a trailing four-quarter earnings surprise of 17%, on average.
The Zacks Consensus Estimate for Grocery Outlet’s current financial-year sales and earnings suggests growth of around 9.3% and 9.4%, respectively, from the year-ago reported numbers.
Vital Farms offers a range of ethically produced foods nationwide. It currently has a Zacks Rank #2. VITL has a trailing four-quarter earnings surprise of 145%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales suggests growth of 29% from the year-ago reported figure.