Target will announce its first fiscal first-quarter revenue before the bell as costly groceries, increasing mortgage rates, and summer vacations weigh on wallets.
In February, the discounter gave a conservative perspective, stating that proportional rates could range from a drop of 1% to a profit of 1% for the full financial year. Its profit forecast fell short of investors’ expectations. Target also cautioned that its margin rate won’t be back to pre-pandemic levels until next fiscal year or next.
As retail earnings season ramped up on Tuesday, Home Depot’s quarterly results sent a worrying signal. The home improvement retailer’s shortfall in earnings and decreased forecast could be a cautionary signal about Target’s quarterly results, too.
According to Refinitiv’s calculations, here is what Wall Street predicts for Target’s quarter:
Earnings per share: $1.76
Revenue: $25.29 billion
Target is facing difficult comparisons after years of substantial sales growth during the pandemic. From fiscal 2019 to 2022, its yearly income increased by almost $31 billion, or about 40%. With its curbside pickup, it functioned as a one-stop shop that sought to restrict store trips or skip retailers entirely.
Now, the gears have changed. Target fell short of achieving income expectations for three quarters in a row before exceeding its own lower target in the holiday season.
The firm had to backtrack after ordering excessive amounts of the wrong goods. It’s now stumbling with weaker sales as customers seek value and stuff fun products into the cart.
Target is more vulnerable since it receives only 21% of its yearly sales from groceries in comparison to Walmart.
Target shares finished Tuesday at $156.98, down over 30% from their 52-week high of $221.65. The company’s market capitalization is $72.42 billion.
