Buyers in a Target store in New York.
Scott Mlyn | CNBC
Target will announce its first quarter results on Wednesday before the bell.
According to Refinitive Consensus Estimates, Wall Street expects:
- Earnings per share: $ 2.25
- Revenue: $ 21.81 billion
The big box retailer saw significant growth during the pandemic as shoppers turned to its stores to purchase everything from groceries to workout clothes and online orders to pick up in the parking lot. The company had a number of impressive numbers during the fiscal year, including more than $ 15 billion in revenue growth – more than total revenue growth over the past 11 years. Target’s like-for-like sales, a key metric that measures sales in stores that are open for at least 13 months and online, increased 19.3% year over year.
These results have raised expectations and prepared the company for difficult year-over-year comparisons. However, the momentum really started in the second quarter of 2020.
This means that Target will face cheaper comparisons in the first quarter. When bans occurred a year ago, target customers initially skipped many discretionary, higher-margin items such as clothing and the retailer’s labor costs skyrocketed. The company struggled to adapt as consumers shopped online and bought more groceries and electronics while working from home.
The earnings reports from other retailers bode well for Target. Walmart, Home Depot, and Macy’s exceeded Wall Street’s expectations for the first quarter. The companies attributed strong sales in part to customers having more cash in their pockets from stimulus checks they received in March. Walmart and Macy’s said customers also purchase items like luggage and teeth whiteners when they travel and go back to parties.
Target didn’t provide a forecast for the year as the pandemic made it difficult to predict consumer spending.
At the close of trading on Tuesday, the target stocks have risen by around 17% this year so far. The stock closed at $ 206.43 on Tuesday, bringing the market value to $ 102.71 billion.