Target stock is rising after another monster quarterly report

Posted by nainternational on November 21st, 2019

Based on the facts and figures that were issued by Target for their third quarter, it is going to be a very merry Christmas for shareholders in the company. For the second quarter consecutively Target, smashed expectations by Wall Street analysts. The company blew sales, earnings, same store sales, and gross profit margin projections out of the water, with online sales surging in the quarter by over 30%. Alongside their great performance this quarter, Target also meaningfully increased their full year guidance, which was great news for shareholders.

In pre-market trading shares in the company spiked almost 8% indicating that the stock will begin trading at a record high. The key figures and statistics that has driven this huge increase in share price, are outlined below against Wall Streets estimates.

  • Same-store sales: 4.5% increase vs. 3.5% estimated increase (Target guidance: up 3.4%)
  • Total sales: .7 billion vs. .22 billion estimate
  • Gross profit margin: 29.8% vs. 29% estimate
  • Earnings per share: .36 vs. .19 estimate (Target guidance: .04 to .24 a share)
  • Full-year earnings guidance: .25 to .45 vs. estimate .18 a share (Target prior guidance: .90 to .20 a share)

With these exceptional results, Target is increasing its market share in the retail sector, and the companies stores are progressing into a new era. CEO of the company Brian Cornell confirmed in a call with analysts that their remodeled stores, are one of the key factors that have boosted sales. There is a whole new host of products and food brands that have partnered with the store. With new lines of apparel, Target saw same store sales pop over 10% in the quarter, alongside food same store sales rising almost the same.

When a retailer the size of Target puts all these new initiatives together, and combine them with same day delivery services, a large number of people are opting to shop online which has also shown the company a huge increase to online sales.

And same-day delivery services are boosting those inclined to shop online.

Yuto Haruki – NA International

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