Target is set to report second-quarter earnings before the bell

Target is set to report its fiscal second-quarter earnings before the bell on Wednesday.

Here’s what Wall Street is expecting, according to Refinitiv consensus estimates:

• Earnings per share: $3.49
• Revenue: $25.08 billion

Target faces challenging comparisons with the year-ago quarter when the retailer’s performance during the pandemic blew away Wall Street’s estimates. During that three-month period, the company’s comparable sales, a key metric that measures sales online and at stores open for at least a year, surged by 24.3% — an all-time high for the retailer — as the company’s digital sales nearly tripled.

Yet analysts remain bullish, pointing to consumers’ appetite for spending and company-specific strengths from curbside pickup to private labels. Target could also pick up sales from the back-to-school season. It may benefit from child tax credits, which began dropping into families’ bank accounts in mid-July, too.

Comparable sales are expected to grow by 8.8% in the second quarter, according to consensus estimates from StreetAccount.

Target’s big-box competitor, Walmart, raised its forecast for the year on Tuesday and said its back-to-school sales got off to a promising start. It said store traffic had picked up and e-commerce sales had slowed.

On the other hand, retail sales numbers fell short of expectations on Tuesday, raising new questions about whether the delta variant is starting to chill spending or if consumers are spending more money on services like airline tickets, concerts and restaurant meals and less on goods.

Simeon Gutman, a retail analyst for Morgan Stanley, said Target “is still the belle of the ball.” He said he expects the retailer to continue “punching way over their market share” in the second quarter, as it attracts new customers and sells more apparel, home decor and other goods.

Target’s shares are up 44% so far this year — outpacing the 31% year-to-date growth of the S&P 500. The stock hit an all-time high of $267.06 last week, but closed at $254.65 on Monday.