Target Corporation (TGT) Surges On Beat And Raise, Lowe’s Slides On Sales Miss

Target Corporation (TGT) Surges On Beat And Raise, Lowe’s Slides On Sales Miss
Target Corporation

Target Corporation (NYSE:TGT) and Lowe’s released their latest earnings reports before opening bell this morning. Target posted adjusted earnings of $1.04 per share on $16.44 billion in revenue, compared to the analyst estimates of 83 cents per share and $16.3 billion in sales. In last year’s third quarter, the big box retailer reported adjusted earnings of 86 cents per share on $17.6 billion in revenue.

Lowe’s reported adjusted earnings of 88 cents per share on $15.74 billion in sales. Analysts had been expecting earnings of 96 cents per share and $15.85 billion in sales. In last year’s third quarter, the home improvement retailer reported $14.36 billion in revenue.

Target shares surge on increased guide

Target’s GAAP earnings rose to $1.06 per share from 87 cents per share last year. The retailer’s comparable sales declined 0.2%, which was toward the high end of management’s guidance of flat to down 2% comparable sales. Comparable sales growth in the company’s Signature Categories outpaced total comparable sales by more than 3 percentage points, while sales from Target’s digital channel surged 26% year over year.

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Target increased its outlook for adjusted earnings for the full year to between $5.10 and $5.30 per share, versus the previous outlook of $4.80 to $5.20 per share. It also boosted its fourth quarter outlook for comparable sales and now is looking for this metric to be down 1% to up 1%. The big box retailer expects GAAP and adjusted earnings for the fourth quarter to be between $1.55 and $1.75 per share.

The company bought back $878 million worth of shares during the third quarter. Shares of Target rose by as much as 8.48% to $77.50 in premarket trades.

Lowe’s says sales below expectations

Lowe’s net earnings plunged to 43 cents per share from 80 cents per share last year. The retailer’s sales comparable store sales rose 2.7%.

“Our third quarter operating results were below our expectations due to slower sales in the first two months of the quarter,” Lowe’s Chairman, President and Chief Executive Robert A. Niblock said in a statement. “While we expected moderation in the second half of the year, traffic slowed more than we anticipated in August and September before improving in October, which put pressure on our profitability in the quarter.”

Lowe’s said it expects full-year sales to rise by 9% to 10% and comparable store sales to rise by 3% to 4%. It projects diluted earnings of about $3.56 per share, marking a significant reduction from the previous outlook of about $4.06 per share.

Shares of Lowe’s slid by as much as 4.39% to $66.02 in premarket trading this morning.

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