Target corporation (New York Stock Exchange:TGT) soared in early trading on Wednesday after the company reported third-quarter earnings that significantly beat consensus estimates.
The retailer reported comparable sales decreased 4.9% for the quarter compared to a consensus of -5.2%.Decrease in discretionary categories partially offset by continued growth Frequency categories, especially in the beauty field. Same-day service increased by more than 8%, led by drive-up, which increased by more than 12%. Total sales for the quarter fell 4.2% to $25.4 billion, beating the consensus mark of $25.2 billion.
Target (TGT)’s operating margin was 5.2%, compared to 3.9% in the same period last year. Gross profit margin was 27.4%, compared to 24.7% in the same period last year. This reflects lower markdowns and other inventory-related costs, lower transportation costs, lower supply chain and digital fulfillment costs, and favorable category mix. The selling, general and administrative expense ratio was 20.9%, compared to 19.7% in the same period last year. This reflects the deleveraging impact of higher costs and lower sales, including continued investment in salaries and benefits, inflationary pressures across TGT businesses, partially offset by disciplined cost management. it was done. With improved margins, Target (TGT) beat expectations for its EPS line, posting $2.10 versus consensus $1.48. Adjusted EBITDA was $2.06 billion, compared to consensus of $1.67 billion and $1.71 billion in the prior year period.
Inventory decreased 14% year-over-year at quarter-end, reflecting a 19% decline in inventory in the discretionary category.
Target (TGT) did not repurchase any shares during the quarter. At quarter end, TGT had approximately $9.7 billion in reserve under its board-approved repurchase program.
CEO Statement: “Third quarter sales were in line with our expectations, but earnings per share far exceeded our expectations. This earnings performance reflects our commitment to efficiency and disciplined inventory management. We have benefited from the efforts of our team and would like to thank them for their contributions.” As we look to the future, we will continue to invest across our business, including our selection, team and service offerings, to deliver the novelty, affordability and convenience our customers expect well beyond the holidays. ”
Looking ahead, Target (TGT) expects broad-based comparable sales to decline mid-single digits and adjusted EPS to be between $1.90 and $2.60 versus the consensus mark of $2.24.
Target (TGT) stock price rises 13.39% During the pre-market session.Walmart (WMT) rises 1.27%Best Buy (BBY) added 1.28%Costco (COST) is on the edge 0.75% taller than.