Target Q3 earnings beat estimates

Target Corporation is the eighth largest American retail corporation. It released its third quarter earnings for FY21 on November 17, 2021 before the market opened. Here is an overview of the latest disclosure.

  • Revenue: $25.7 billion vs $24.84 billion expected
  • EPS: $3.04 adjusted vs $2.85 expected
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Financial Highlights
  • Third quarter comparable sales grew 12.7 percent, on top of 20.7 percent growth last year.
    • Comparable sales growth was driven entirely by traffic.
    • Store comparable sales increased 9.7 percent, on top of 9.9 percent growth last year.
    • Digital comparable sales grew 29 percent, following growth of 155 percent last year.
    • Same-day services (Order Pickup, Drive Up and Shipt) grew nearly 60 percent this year, on top of more than 200 percent last year.
    • Target’s stores fulfilled more than 95 percent of its third quarter sales.
  • All five core merchandise categories delivered double-digit comparable sales growth, on top of strong sales performance last year.
  • Third quarter GAAP EPS of $3.04 was 51.6 percent higher than last year, and Adjusted EPS1 of $3.03 was 8.7 percent higher than last year. Third quarter GAAP and Adjusted EPS have both more than doubled since Q3 2019.

CEO’s Statement

“The consistently strong growth we’re seeing in our business, quarter after quarter, is a testament to the passion and commitment our team brings to serving our guests, and the trust we’ve built with them as a result. Following comp growth of nearly 21 percent a year ago, our third quarter comp increase of 12.7 percent was driven entirely by traffic, and reflects continued strength in our store sales, same-day digital fulfillment services and double-digit growth in all five of our core merchandising categories. With a strong inventory position heading into the peak of the holiday season, our team and our business are ready to serve our guests and poised to deliver continued, strong growth, through the holiday season and beyond.”

– said Brian Cornell, chairman and chief executive officer of Target Corporation.
Analysts Estimates

The Zacks Consensus Estimate for the EPS of the company was pinned at $2.85. This indicated a mere increase of 2.15% year-over-year. However, it also indicated a decline of 22% than that of the previous quarter.

The Earnings Expected Surprise Prediction was pegged at 1.31% which suggested that the consensus expected Target to beat its estimates.

The estimated revenue was pegged at $24.84 billion. This indicated a slight growth of 9.76% than that of the previous year.

Earnings History

Target’s reported second quarter earnings and revenue for FY21 that beat the consensus estimates. The posted Earnings per share (EPS) was $3.65 against an estimate of $3.48. Further, the reported revenue was $25.2 billion against an estimate of $24.84 billion.

Key highlights for the quarter included:

  • Second quarter comparable sales grew 8.9 percent, on top of record growth of 24.3 percent last year.
  • All five core merchandise categories delivered positive comparable sales, on top of last year’s historic sales performance.
  • Second quarter GAAP EPS of $3.65 was 8.9 percent higher than last year, and Adjusted EPS of $3.64 was 7.9 percent higher than last year. Second quarter GAAP and Adjusted EPS have doubled since Q2 2019.
  • Target’s Board of Directors has approved a new, $15 billion share repurchase program.

The Minneapolis-based retailer witnessed robust growth in sales and profitability in the first quarter. For the first quarter, Target reported GAAP earnings per share (EPS) of $4.17, an increase of 643.2 % versus last year’s $0.56. The company gained more than $1 billion in market share, on top of a $1 billion share gain in the first quarter of 2020.

Future Forecast

Analysts estimate the earnings for the fourth quarter of FY21 to be $2.94 per share. This indicates a slight growth of 10.11% year-over-year. The estimated revenue is pinned at $30.79 billion. It also indicates a slight growth of 8.66% than that of the previous year.

The Annual Forecast estimates the earnings of FY21 to be $13.07 per share. This indicates a modest increase of 38.75% than that of the previous year. The estimated revenue is pinned at $105.01 billion. It also indicates a slight growth of 12.24% year-over-year.

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