{"id":34707,"date":"2023-11-15T12:00:43","date_gmt":"2023-11-15T12:00:43","guid":{"rendered":"https:\/\/isafespend.com\/news\/target-shares-jump-after-retailer-posts-a-big-earnings-beat-even-as-sales-fall-again\/"},"modified":"2023-11-15T12:00:44","modified_gmt":"2023-11-15T12:00:44","slug":"target-shares-jump-after-retailer-posts-a-big-earnings-beat-even-as-sales-fall-again","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=34707","title":{"rendered":"Target shares jump after retailer posts a big earnings beat, even as sales fall again"},"content":{"rendered":"<div id=\"RegularArticle-ArticleBody-6\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-6-2\"><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"><\/span><\/p>\n<div class=\"group\">\n<p><span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-1\">Target<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> on Wednesday topped Wall Street&#8217;s quarterly sales expectations and blew past earnings estimates, as purchases in high-frequency categories like food and beauty helped prop up weaker customer spending.\u00a0<\/p>\n<p>Shares of the company rose more than 10% in premarket trading on the news, partially a reflection of the stock&#8217;s drop so far this year.<\/p>\n<p>Yet the big-box retailer stared down the same challenges that it has faced over the past year. Shoppers aren&#8217;t buying much more than the necessities. They&#8217;re hungry for lower prices. And when they do make purchases, they&#8217;re postponing them \u2013 such as waiting until the temperature drops to buy a pair of jeans or a sweatshirt, CEO Brian Cornell said.<\/p>\n<p>For the second straight quarter, Target&#8217;s comparable sales declined. The industry metric, also called same-store sales, takes out the impact of store openings, closures and renovations.\u00a0<\/p>\n<p>Chief Financial Officer Michael Fiddelke said on a call with reporters that the Minneapolis-based company is &#8220;laser focused on moving both traffic and sales back into positive territory.&#8221;<\/p>\n<p>Yet he and Target&#8217;s leadership team cautioned that won&#8217;t happen this year, even as holiday shoppers hit stores and websites for decorations, gifts and more.<\/p>\n<p>Here&#8217;s what the retailer reported for the fiscal third quarter ended Oct. 28 compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:<\/p>\n<ul>\n<li>Earnings per share: $2.10 vs. $1.48 expected<\/li>\n<li>Revenue: $25.4 billion vs. $25.24 billion expected<\/li>\n<\/ul>\n<\/div>\n<div class=\"group\">\n<div class=\"RelatedContent-relatedContent\" id=\"RegularArticle-RelatedContent-1\">\n<div class=\"RelatedContent-container\">\n<div class=\"RelatedContent-nonCollapsibleContent\">\n<h2 class=\"RelatedContent-header\">Read more CNBC retail news<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Sales have slowed across the retail industry as consumers feel a budget crunch from elevated prices and choose to spend on experiences instead. Yet Target, which sells a heavier mix of clothing, home goods and impulse purchases than key rivals, has been particularly squeezed.\u00a0<\/p>\n<p>Plus, it has faced its own challenges. Target got blowback for a collection of merchandise for Pride month, a celebration of LGBTQ+ people and issues, that it has sold for more than a decade. It got hit by higher levels of organized retail crime. And it recently shuttered nine stores in major cities, blaming the closures on theft and threats of violence.<\/p>\n<p><span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"RegularArticle-QuoteInBody-6\">Target&#8217;s stock<span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span> has suffered, too. It had fallen nearly 26% this year as of Tuesday&#8217;s close, with its value cut by more than half since the highs of the Covid pandemic.<\/p>\n<p>In the third quarter, Target&#8217;s total revenue fell from $26.52 billion in the year-ago period. Comparable sales dropped nearly 5% year over year, as customers bought fewer discretionary items. Digital sales declined by 6% compared with the year-ago period.<\/p>\n<\/div>\n<div role=\"region\" aria-labelledby=\"Placeholder-ArticleBody-Video-107327640\">\n<div role=\"button\" tabindex=\"0\" id=\"Placeholder-ArticleBody-Video-107327640\" class=\"PlaceHolder-wrapper\" data-vilynx-id=\"7000321222\" data-test=\"VideoPlaceHolder\">\n<div class=\"InlineVideo-videoEmbed\" id=\"InlineVideo-0\" data-test=\"InlineVideo\">\n<div class=\"InlineVideo-wrapper\">\n<div class=\"InlineVideo-inlineThumbnailContainer\"><span class=\"InlineVideo-videoButton\"><\/span><span><\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>While discretionary categories remain soft, Chief Growth Officer Christina Hennington said trends &#8220;improved markedly&#8221; compared to the fiscal second quarter. She chalked up those better results to trendy merchandise, including Target&#8217;s new brand of kitchenware, fall fashion apparel for women and jewelry from its new line with Kendra Scott.<\/p>\n<p>The retailer showed progress in building back its profits despite the sales challenges. Its net income in the third quarter jumped about 36% to<strong> <\/strong>$971 million, or $2.10 per share, from $712 million, or $1.54 per share, a year earlier. Total revenue fell from $26.52 in the year-ago period.<\/p>\n<p>The big-box retailer said it expects the holiday quarter to look roughly the same, with comparable sales in a range of around a mid-single digit decline and adjusted earnings per share of $1.90 to $2.60.<\/p>\n<p>But Target&#8217;s<strong> <\/strong>significant earnings gain in the third quarter also reflected its weakness in the year-ago period, when it canceled orders and sold merchandise at deep discounts to clear through a glut of unwanted inventory. It took that aggressive action to try to get ahead of last holiday season.\u00a0<\/p>\n<p>Fiddelke attributed Target&#8217;s improved profits to better management of<strong> <\/strong>inventory and expenses, rather than stronger sales. Inventory levels declined 14% at the end of the quarter compared to the end of the year-ago quarter, when the company had lots of excess merchandise.<\/p>\n<p>&#8220;A store can run more efficiently when their back rooms are free of inventory,&#8221; he said. &#8220;A distribution center runs more efficiently, with fewer touches, when it&#8217;s not as full, too.&#8221;<\/p>\n<p>As it shows progress with inventory, Target is now trying to boost sales in the critical holiday quarter.<\/p>\n<p>This week, shoppers can already see Target&#8217;s website plastered with Black Friday deals. Yet Cornell said it&#8217;s too soon to weigh in on early holiday sales, saying the company is &#8220;watching the trends carefully.&#8221;<\/p>\n<p>To drum up sales during the season, Hennington said the retailer will lean on new and exclusive merchandise \u2013 including thousands of gifts under $25.\u00a0<\/p>\n<\/div>\n<div class=\"group\">\n<div class=\"RelatedContent-relatedContent\" id=\"RegularArticle-RelatedContent-2\">\n<div class=\"RelatedContent-container\">\n<div class=\"RelatedContent-nonCollapsibleContent\">\n<h2 class=\"RelatedContent-header\">Jim Cramer\u2019s Investing Club<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.cnbc.com\/2023\/11\/15\/target-tgt-earnings-q3-2023.html\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Target on Wednesday topped Wall Street&#8217;s quarterly sales expectations and blew past earnings estimates, as purchases in high-frequency categories like food and beauty helped prop up weaker customer spending.\u00a0 Shares of the company rose more than 10% in premarket trading on the news, partially a reflection of the stock&#8217;s drop so far this year. Yet<\/p>\n","protected":false},"author":1,"featured_media":34708,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[43],"tags":[],"class_list":{"0":"post-34707","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.12 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Target shares jump after retailer posts a big earnings beat, even as sales fall again | iSafeSpend<\/title>\n<meta name=\"description\" content=\"Target on Wednesday topped Wall Street&#039;s quarterly sales expectations and blew past earnings estimates, as purchases in high-frequency categories like\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/isafespend.com\/?p=34707\" \/>\n<meta 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