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Target (TGT) vs. Walmart (WMT): Which Had Better Q2 Earnings?
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Shares of Target (TGT - Free Report) surged over 6% Wednesday morning to touch a new all-time high after the retailer reported quarterly financial results that impressed investors and helped continue a wave of retail momentum. Fellow powerhouse Walmart (WMT - Free Report) posted similarly strong Q2 results last week. So let’s take a look to see which company performed better.
Retail Overview
Retailers have shined in the second quarter, driven by a booming economy and growing consumer confidence. Plus, retailers’ efforts to dive head first into e-commerce and delivery seem to be paying off. For a few years, much of the discussion around retail focused on Amazon’s (AMZN - Free Report) disruption, but fears that the Seattle-based company would take over and drive giants like Target or Walmart out of business were never serious.
Jeff Bezos’ firm did, however, spark these giants to revamp and improve faster than they might otherwise have, had Amazon not made such a splash. Now investors have seen strong reports from Home Depot (HD - Free Report) to Nordstrom (JWN - Free Report) and nearly everyone in between.
Target Overview
Target saw its quarterly revenues climb by 6.9% to reach $17.78 billion, which topped our Zacks Consensus Estimate for the sixth straight quarter. The company also posted adjusted earnings of $1.47 per share, which not only marked nearly 20% growth but also beat our estimate.
Investors were likely more impressed to see Target’s comparable sales surge 6.5%—its strongest quarterly performance since 2005 in this vital category. Meanwhile, digital comps soared 41% and traffic expanded by of 6.4%, which marked the best growth since the firm began reporting the figure in 2008. The company also saw its comparable store sales pop by 4.9%, which marked its fifth straight quarter of increasing same-store sales.
Target’s stellar Q2 performance helped to show that brick-and-mortar is far from over. More importantly, it seems that Target’s multibillion-dollar, early 2017 plan to improve its business is paying off.
Over the last year-plus, Target has redesigned its stores, opened smaller stores in college towns and urban areas, and improved its pricing strategy to become more competitive. On top of that, Target has introduced new lines and products, and updated its digital strategy and supply chain. Furthermore, the Minneapolis-based retailer has introduced same-day delivery at over 700 locations—made possible by its acquisition of grocery delivery startup Shipt—and rolled out online ordering and curbside pickup at hundreds of stores.
WMT Overview
Last week, Walmart saw its quarterly revenues surged 3.8% to hit roughly $128 billion, which surpassed our estimate. The retail powerhouse’s adjusted earnings climbed 19% to $1.29 per share.
Walmart’s U.S. comparable store sales jumped by 4.5%. The firm’s comps growth not only came in well above the 2.4% that analysts had called for but also represented its strongest growth in more than ten years—boosted by strength from grocery and apparel. What’s more, Walmart’s ever more important e-commerce sales skyrocketed by 40%. WMT’s e-commerce performance was bolstered by its redesigned website and improved navigation, which helped attract more new brands to work with the retail giant.
The company noted that its online order and grocery pickup service is now available at more than 1,800 locations. Walmart also said that its grocery delivery offering is on track to reach roughly 40% of the U.S. by the end of the year.
Target Outlook
Looking ahead, Target expects to see comparable sales growth in line with the first half’s 4.8% for both Q3 and the second half of the year. The firm also said it expects its adjusted Q3 EPS figure to come in the range of $1.00 to $1.20, with full-year earnings projected at $5.30 to $5.50 per share—up from $5.15 to $5.45 a share.
Our current estimate is calling for Target to post adjusted fiscal year earnings of $5.29 per share, which would mark a 12.3% climb from the year-ago period. On the top line, Target is projected to see its full-year revenues climb by 2.3% to reach $73.55billion. But investors should note that these estimates could change based on today’s results.
Walmart Outlook
Walmart last week raised its earnings outlook for the year to between $4.90 and $5.05 a share, which was up from its previously guided range of $4.75 to $5 a share (investors should note that the firm’s guidance excludes any impact from its pending purchase of Indian e-commerce firm Flipkart). Looking ahead, WMT is projected to see its fiscal year revenues pop by 2.5% to reach $512.89 billion. Meanwhile, its adjusted earnings are expected to hit $4.77 per share, which would mark a 7.92% expansion.
Bottom Line
Cleary, both retail behemoths helped to prove that their future-looking initiatives have worked. Therefore, it is hard to declare a winner in this battle between Walmart and Target’s second-quarter financial results, especially since both companies posted their strongest comps growth in over a decade. But the edge seems to go to Target based on its larger comparable sales growth and slightly greater digital expansion.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
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Target (TGT) vs. Walmart (WMT): Which Had Better Q2 Earnings?
Shares of Target (TGT - Free Report) surged over 6% Wednesday morning to touch a new all-time high after the retailer reported quarterly financial results that impressed investors and helped continue a wave of retail momentum. Fellow powerhouse Walmart (WMT - Free Report) posted similarly strong Q2 results last week. So let’s take a look to see which company performed better.
Retail Overview
Retailers have shined in the second quarter, driven by a booming economy and growing consumer confidence. Plus, retailers’ efforts to dive head first into e-commerce and delivery seem to be paying off. For a few years, much of the discussion around retail focused on Amazon’s (AMZN - Free Report) disruption, but fears that the Seattle-based company would take over and drive giants like Target or Walmart out of business were never serious.
Jeff Bezos’ firm did, however, spark these giants to revamp and improve faster than they might otherwise have, had Amazon not made such a splash. Now investors have seen strong reports from Home Depot (HD - Free Report) to Nordstrom (JWN - Free Report) and nearly everyone in between.
Target Overview
Target saw its quarterly revenues climb by 6.9% to reach $17.78 billion, which topped our Zacks Consensus Estimate for the sixth straight quarter. The company also posted adjusted earnings of $1.47 per share, which not only marked nearly 20% growth but also beat our estimate.
Investors were likely more impressed to see Target’s comparable sales surge 6.5%—its strongest quarterly performance since 2005 in this vital category. Meanwhile, digital comps soared 41% and traffic expanded by of 6.4%, which marked the best growth since the firm began reporting the figure in 2008. The company also saw its comparable store sales pop by 4.9%, which marked its fifth straight quarter of increasing same-store sales.
Target’s stellar Q2 performance helped to show that brick-and-mortar is far from over. More importantly, it seems that Target’s multibillion-dollar, early 2017 plan to improve its business is paying off.
Over the last year-plus, Target has redesigned its stores, opened smaller stores in college towns and urban areas, and improved its pricing strategy to become more competitive. On top of that, Target has introduced new lines and products, and updated its digital strategy and supply chain. Furthermore, the Minneapolis-based retailer has introduced same-day delivery at over 700 locations—made possible by its acquisition of grocery delivery startup Shipt—and rolled out online ordering and curbside pickup at hundreds of stores.
WMT Overview
Last week, Walmart saw its quarterly revenues surged 3.8% to hit roughly $128 billion, which surpassed our estimate. The retail powerhouse’s adjusted earnings climbed 19% to $1.29 per share.
Walmart’s U.S. comparable store sales jumped by 4.5%. The firm’s comps growth not only came in well above the 2.4% that analysts had called for but also represented its strongest growth in more than ten years—boosted by strength from grocery and apparel. What’s more, Walmart’s ever more important e-commerce sales skyrocketed by 40%. WMT’s e-commerce performance was bolstered by its redesigned website and improved navigation, which helped attract more new brands to work with the retail giant.
The company noted that its online order and grocery pickup service is now available at more than 1,800 locations. Walmart also said that its grocery delivery offering is on track to reach roughly 40% of the U.S. by the end of the year.
Target Outlook
Looking ahead, Target expects to see comparable sales growth in line with the first half’s 4.8% for both Q3 and the second half of the year. The firm also said it expects its adjusted Q3 EPS figure to come in the range of $1.00 to $1.20, with full-year earnings projected at $5.30 to $5.50 per share—up from $5.15 to $5.45 a share.
Our current estimate is calling for Target to post adjusted fiscal year earnings of $5.29 per share, which would mark a 12.3% climb from the year-ago period. On the top line, Target is projected to see its full-year revenues climb by 2.3% to reach $73.55billion. But investors should note that these estimates could change based on today’s results.
Walmart Outlook
Walmart last week raised its earnings outlook for the year to between $4.90 and $5.05 a share, which was up from its previously guided range of $4.75 to $5 a share (investors should note that the firm’s guidance excludes any impact from its pending purchase of Indian e-commerce firm Flipkart). Looking ahead, WMT is projected to see its fiscal year revenues pop by 2.5% to reach $512.89 billion. Meanwhile, its adjusted earnings are expected to hit $4.77 per share, which would mark a 7.92% expansion.
Bottom Line
Cleary, both retail behemoths helped to prove that their future-looking initiatives have worked. Therefore, it is hard to declare a winner in this battle between Walmart and Target’s second-quarter financial results, especially since both companies posted their strongest comps growth in over a decade. But the edge seems to go to Target based on its larger comparable sales growth and slightly greater digital expansion.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>