Target Earnings: What You Need To Know

It looks like the tables have turned, as Walmart (WMT) is set to usurp Target (TGT) as America’s favorite big-box retailer. This Wednesday, May 22nd, Target debuted less than stellar Q1 Earnings report, Yahoo Finance’s Brooke DiPalma explains: “It’s really the tale of two retailers…Target falling 3.7 percent. Just last week, we saw same-store sales from Walmart impress The Street with an upside of 3.8 percent.”

Target’s higher quality, albeit more expensive offerings, appear to be out of reach for the average Joe or Jane on Main Street. They are turning on the red and white retail giant, finding their dollar stretches further when shopping at Walmart. Yahoo Finance’s Brian Sozzi reiterates: “Everywhere you look in this Target quarter, it stunk from top to bottom. They noted that inflation is starting to slow, but they are not seeing a corresponding improvement in sales.”

Inflation appears to be the key catalyst for Target’s struggling sales. In response to this continued sales drop, the company announced price cuts to around 5,000 of their products, with more price cuts coming over the summer. D.A. Davidson Managing Director Michael Baker sees this as a bullish move, “the key right now is for them to get customers in the door, and win back some traffic and win back some market share.” So although Target may be down, they certainly are not out.

Consumers may not have turned on Target, they simply just cannot afford it. Former Toys”R”US CEO Jerry Storch states: “Target has made it’s name selling nice-to-have fun products. That is not what the consumer is buying right now!” Despite these current struggles, Target has proven itself as a quality company with “a great deal of consumer brand equity,” even with a strike out earnings report in 2024 “consumers still love shopping there, so I think they have a lot to work with, it’s just going to take awhile.”

This post was written by Noah Chadwick

GFX_AE

Video Transcript

On Wednesday, everyone target will release its latest earnings report.

Brad target earnings are indeed on tap for the first quarter.

Analysts are expecting earnings per share of 205 on revenue heading into their support.

The stock is up about 10% this year.

Among financial analysts opinion fairly divided on Wall Street, 20 buys, 15 holds and one sell the brand of the bull’s eye.

Yeah, the benefit for target right now, I suppose is that expectations are very low.

Uh We’re looking for central sales to be down 4%.

So not a very high bar targets, disappointing sales pointing to cracks in the consumer, Ceo Brian Cornell saying that inflation is straining customers wallets very similar warning to what we’ve heard from Home Depot Lowes and even some fast food companies this earnings season.

Story continues

It really is the tale of two retailers that were here target falling down roughly 3.7%.

Now just last week, we saw same source sales from Walmart impress the tree with the upside of 3.8% everywhere you looked in this target quarter, it stunk from top to bottom and I’m surprised target is out here reiterating its guidance on that call with Brian Cornell and the CFO and I believe was the Chief uh chief Merchandise Officer.

They noted that inflation is starting to slow, but they’re not seeing a corresponding improvement in sales.

And that is a big problem.

The near term momentum has to go to Walmart target right now is thought of as more of a discretionary retailer.

We argue that they both can continue to outperform given the relative positioning of those businesses along with their valuation is target’s reduction of prices for 5000 items bullish or bearish for the.

We think it’s a positive, I think the key right now is for them to get customers in the door.

Uh and, and win back some traffic and win back some market share.

So we think it’s the right thing to do and and should pay back, uh pay off, uh you know, with positive problems later in the year.

I I think the consumer has been snowing for some time to some degree.

This, it’s been disguised oddly enough by inflation.

So essentially what’s happening is the consumer spending more and getting less and they know it and target being a retailer who’s made its name on those kind of nice to have fun products and that’s not what the consumer is buying right now.

But, but they’re a huge retailer.

They have a great deal amount of consumer brand equity.

People still love shopping there.

So I think they have a lot of work, a lot to work with.

So I’m not tagging them out, but it’s gonna take a while.