Target shares fall on mixed fourth-quarter results

Target outpaced analysts’ earnings expectations in the fourth-quarter, but sales fell short as the retailer wasn’t able to overcome weak sales of toys, electronics and home goods over the holidays.

Shares were down 1% in premarket trading.

Here’s what Target reported compared with what analysts were expecting, based on a survey of analysts by Refinitiv:

• Earnings per share, adjusted: $1.69 vs. $1.65 expected
• Revenue: $23.40 billion vs. $23.50 billion expected
• Same-store sales growth: 1.5% vs. 1.5% expected 

In the fourth quarter ended Feb. 1, net income grew to $834 million, or $1.63 per share, from $799 million, or $1.52 per share, a year earlier.

Excluding items, Target earned $1.69 per share, which was higher than the $1.66 per share analysts were expecting, according to Refinitiv.

Target said revenue grew to $23.40 billion, from $22.98 billion last year, and lower than the $23.50 billion analysts expected.

Sales at stores open at least a year rose 1.5%, in line with expectations. 

In the first quarter of fiscal 2020, Target has called for $1.55 to 1.75 earnings per share and for same-store sales to grow in the low single digits. 

Analysts surveyed by Refinitiv estimated Target would earn $1.66 per share on revenue of $18.19 billion and same-store sales would grow by 2.7% in the quarter.

In fiscal 2020, Target has said earnings per share will be between $6.70 and $7.00, compared to analysts’ estimates of $6.87. It said same-store sales will grow by the low single digits, while analysts said they’ll be up by 3.2%

Target CEO Brian Cornell touted the retailer’s growth in e-commerce and in stores. It has had 11 consecutive quarters of growth at stores opened at least a year.

“The strategic investments we’ve made over the past several years to elevate the shopping experience, curate our multi-category assortment at scale, and deliver ease and convenience through our fulfillment capabilities are deepening our relationship with our guest,” he said in a news release.

Target surprised Wall Street in January when it disclosed slower than expected holiday sales.

In the fiscal fourth quarter, Target said same-day services, including online order pickup, drive up and same-day Shipt orders, accounted for more than 80% of its comparable digital sales growth.

Target’s shares have gained nearly 50% over the past 12 months, bringing its market value to $55.3 billion.

Read full press release here.

CORRECTION: This article has been updated to show that Wall Street is expecting earnings per share of $1.65.