Home Stock Target beats on every metric on Q3: why are the shares still down?

Target beats on every metric on Q3: why are the shares still down?


Shares of Target Corp (NYSE: TGT) are down about 4.0% this morning, which is surprising since it just reported quarterly results that beat on every metric.

Highlights from CEO Cornell’s interview on CNBC’s ‘Squawk Box’

The price action could have been due to the extremely high expectations only and not because the retailer lacks on any front. CEO Brian Cornell echoed the same and said on CNBC’s “Squawk Box”:

There’s just continued demand across all of our categories. We expect that to continue into the holiday season, helping us grow market share on top of $9.0 billion worth of share we added last year amidst the pandemic.

According to the chief executive, Target is making key investments to brace itself for a strong demand during the holiday season.

We made some important investments in the supply chain to make sure we have the inventory for the holiday season and in our team to make sure we have the staffing in place.

Target was one of the major U.S. retailers that chartered its own ships to deal with the ongoing supply chain constraints.

Key takeaways from Target’s Q3 earnings report

Target’s net income printed at $1.49 billion in Q3 ($3.04 per share) versus the year-ago figure of $1.01 billion ($2.01 per share). On an adjusted basis, it earned $3.30 per share.

The retail giant generated $25.65 billion in revenue, representing an annualised growth of 13.35%. According to FactSet, experts had forecast $2.82 of adjusted EPS on $24.61 billion in revenue. Last month, the Bank of America added Target to its top retail picks for the fourth quarter.

Target says its inventory, compared to last year, is up more than $2.0 billion. Digital sales were up 29% YoY, and its same-day services saw 60% more activity. Comparable sales came in 12.7% up in the recent quarter versus the FactSet consensus of 8.2%.  

For the holiday quarter, Target now forecasts same-store sales to be up more than 10% at the top end, as per the earnings press release. Analysts, on the other hand, are calling for a 7.2% increase; more in line with the retailer’s previous guidance for high-single-digit growth in comparable sales this quarter.

The post Target beats on every metric on Q3: why are the shares still down? appeared first on Invezz.

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