Target Reports Profit, Sales Growth
19 November 2015 - 12:50AM
Dow Jones News
Target Corp. on Wednesday reported a better-than-expected
increase in third-quarter sales as the retailer's merchandise
changes are paying off, helping to ease concerns over spending
heading into the key holiday shopping season.
Shares in the company, down about 3% this year, rose 1.5%
premarket.
Target's results follow Wal-Mart Stores Inc.'s third-quarter
report, which showed increased domestic sales but lower profits as
recent changes that helped attract shoppers bit into the bottom
line. Wal-Mart, which recently cut its long-term guidance, gave an
upbeat outlook for the current quarter and helped counter the view
that Americans are simply not shopping.
Last week, weak quarterly sales figures from department-store
chains including Macy's Inc. and Nordstrom Inc. sent retail stocks
tumbling. Meanwhile, the government reported a disappointing
increase in October retail sales. But there are pockets of
strength, with other retailers such as Home Depot Inc. posting
sales gains.
Like Wal-Mart, Target is in the midst of a turnaround and has
spruced up stores to attract more customers. Under Chief Executive
Brian Cornell, Target has also shifted its focus to core categories
of style, baby, children and wellness. In the latest quarter, sales
at existing stores grew 1.9%, at the high-end of the increase the
company predicted but slower than in recent periods.
The third quarter marked the fourth consecutive quarter of
traffic growth, and Target's sales growth continues to be led by
signature categories, said Mr. Cornell. Heading into the holiday
season, Target issued upbeat fourth-quarter guidance, forecasting
$1.48 to $1.58 a share, bracketing the average analyst estimate of
$1.54.
In all for the third quarter, Target reported a profit of $549
million, or 87 cents a share, up from $352 million, or 55 cents, a
year earlier. Excluding certain items, including investment losses
in Canada, earnings rose to 86 cents from 79 cents. Revenue
increased 2.1% to $17.61 billion. Analysts projected 86 cents in
per-share profit on $17.57 billion in sales, according to Thomson
Reuters.
For the year, Target lifted the low-end of the guidance range it
has raised several times this year. The company now expects
adjusted earnings of $4.65 to $4.75 a share, compared with its
earlier range of $4.60 to $4.75 a share.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 18, 2015 08:35 ET (13:35 GMT)
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