Target released its latest earnings report before opening bell this morning, posting adjusted earnings of $1.21 per share on $16.02 billion in revenue. Analysts had been expecting earnings of 91 cents per share on $15.62 billion in sales. In the year-ago quarter, the big box retailer posted adjusted earnings of $1.29 per share on $16.19 billion in sales.
Target sales fall, but not as much as had been expected
Target reported GAAP earnings from continuing operations of $1.22 per share, an increase from the $1.02 per share in GAAP profits it posted a year ago. Net earnings including discontinued operations rose to $1.23 per share from $1.05 per share a year ago.
Comparable store sales fell 1.3% year over year, although consensus was looking for a 3.7% decline. The retailer said “small” declines in traffic and basket size drove the decline in comparable sales. Comparable digital channel sales rose 22% year over year, compared to the 23% increase recorded in the first quarter of last year. Digital channel sales contributed 0.8 percentage points of comparable sales growth. Segment EBIT declined 11% year over year to $1.178 billion.
“After starting the quarter with very soft trends, we saw improvement later in the quarter, particularly in March,” Target Chairman and Chief Executive Brian Cornell said in a statement. “We are in the early stage of a multi-year effort to position Target for profitable, consistent long-term growth, and while we are confident in our plans, we are facing multiple headwinds in the current landscape. As a result, we will continue to plan our business prudently while preparing our team to chase business when we have an opportunity.”
Target provides guidance
For the second quarter, Target expects GAAP and adjusted earnings of 95 cents to $1.15 per share. The company noted that it did not increase its full-year GAAP and adjusted earnings per share outlook, but it added that the better-than-expected results from the first quarter puts it on track to end the year above the midpoint of the previously provided full-year outlook. The big box retailer expects comparable sales to decline by the low-single digits in the second quarter.
Shares of Target surged by as much as 7.94% to $58.86 in premarket trades this morning.
