Target is set to report its financial results for the holiday quarter, as well as provide an outlook for the year ahead. The Wall Street analysts surveyed by LSEG are expecting the following for the company’s fourth quarter:
– Earnings per share: $2.41 expected
– Revenue: $31.83 billion expected
Target, known for its sales of discretionary items like clothing and home goods, has been experiencing declining comparable sales over the past two quarters. The company has acknowledged that this trend is likely to continue, even during the holiday season. In an effort to attract value-focused shoppers, Target has focused on offering low prices and emphasizing high-frequency categories such as food and beauty. The retailer also made an effort to provide a wide range of toys and gifts under $25 during the holiday season.
One of the challenges faced by Target is its smaller presence in the grocery business compared to big-box rival Walmart. While groceries account for about 20% of Target’s annual sales, they make up nearly 60% of Walmart’s annual sales in the U.S. This discrepancy puts Target at a disadvantage, as groceries are known to drive foot traffic and ensure steadier sales, even during times when shoppers are cutting back on other categories.
In addition to the grocery challenge, Target has also been dealing with the closure of pharmacies within some of its stores. CVS Health announced in January that it would be shutting down certain pharmacy locations in Target stores, as part of a broader plan to reduce its store count. While the exact number of closures was not disclosed, this move could potentially impact Target’s overall store traffic and sales.
Target will be holding a financial meeting with investors in New York City to discuss its results and outlook. Despite a 6% increase in its share price so far this year, Target’s performance falls short of the approximately 8% gains of the S&P 500 during the same period. As of Monday’s close, Target’s shares were trading at $150.49 apiece, giving the company a market value of nearly $70 billion. Investors are eagerly awaiting updates on Target’s performance and future prospects during the upcoming meeting.
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