Despite Earnings Beat, Target Faces Challenges Going Forward
Target (NYSE:TGT) announced mixed results for the first quarter on Wednesday. The company reported revenues of $16.2 billion during the quarter, which missed Reuters’ compiled consensus estimates by roughly $120 million and were also short of the $17.1 billion reported last year. The sales decline of 5.4% was Target’s slowest growth since 2014. Target still managed to report adjusted earnings of $1.29 per share in the first quarter, more than 16% ahead of the $1.10 reported in the prior year quarter and easily beating the higher end of its own guidance.
Comparable-store sales increased 1.2% in this quarter but the gain was more than offset by sale of its pharmacy business to CVS last year. Though digital sales have risen as compared to last year, retailers are still struggling to improve foot traffic to boost their net sales.
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Target also announced guidance for the second quarter that was lower than what analysts were expecting due to a slowdown in consumer demand.
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