As we rapidly approach Black Friday and the official start to the holiday shopping season, I am taking extra look at retail earnings, particularly, Target Corporation (NYSE:TGT). Black Friday is a little over a week away and the pre-holiday shopping period is here, but the real sales and deals will come on and after Thanksgiving. I have covered a few retailers in the past few weeks to determine my outlook and analyst views on the companies that will be competing for sales here coming up. However, Target reported third quarter earnings today. The big box retailer posted earnings of $0.54 earnings per share on revenue of $17.73 billion. Analysts were looking for earnings per share of $0.47 on revenue of $17.56 billion. Target may have beaten analysts’ estimates, but earnings per share slipped from a year ago, which was higher at $0.56. The company is additionally forecast to hire 70,000 workers for the holiday shopping season. Shares of Target are up over 5% after the earnings release in early trading.
Target’s 3Q earnings outlook
Overall, Target Corporation (NYSE:TGT) beat analysts and their estimates by a nice margin, but against 2013 results, earnings per share came up short. This is a little discouraging, but consider the fact that Target is still recovering and trying to clean up its image after a cyber attack during the holiday shopping season last year exposed millions of customer credit cards. Target has been working extremely hard to revamp its security systems and encrypted customer data to protect against another attack in the future, should there be another one. The breach last year was definitely a big blow to Target and its public image, additionally the hack couldn’t have come at a worse time. However, the company took to providing value for customers such as Target’s free shipping for online purchases as the holiday season lurks. Target also wants to be ahead of the competitive curb by announcing its intent on accepting Apple Pay.
Target facing competition
Target Corporation (NYSE:TGT) certainly took a hit last year, but has rebounded and looks stronger. Revenue was very strong, but earnings per share struggled. Target does face some steep and strong competition during this time of year, but the company has announced some competitive Black Friday deals, which should help drive traffic to the stores. Ultimately, it is too early to tell if Target will have a successful holiday 2014 season, but positive earnings going into the shopping season is a plus and very positive from an investment point of view. However, the real question is, can Target capitalize on its rebuilding efforts and a good quarter to see a nice result in holiday sales?