- Target will report its fiscal second-quarter earnings before Wednesday.
- The retailer said in late May that it expects similar sales to decline in low single digits in the second quarter.
- Target is trying to recover from weak discretionary demand and a backlash from its own Pride collection.
Target store on May 17, 2023 in North Miami Beach, Florida.
Joe Riddle | Getty Images
Target will report its fiscal second-quarter earnings on Wednesday, with consumers sending mixed messages about their willingness to spend.
The discounter, which saw massive sales gains during the Covid pandemic, is trying to bounce back from a disappointing last year. Earnings were impacted by excess inventory, higher write-downs and weak demand for discretionary merchandise.
The company told investors in late May that its sales trends had eased that month. She said she expects a low single-digit decline in comparable sales in the second quarter. For the full fiscal year, you would expect comparable sales to range from a low single-digit decline to a low single-digit increase.
Here’s what analysts expect for the fiscal second quarter, according to Refinitiv consensus estimates:
- Earnings per share: $1.39
- Revenue: $25.16 billion
Target may be vulnerable to disappointing investors this quarter. Unlike competitor Walmart, Target relies more on categories like clothing, home goods, and electronics—items that families have stopped buying infrequently while paying more for food and necessities. Grocery accounts for only about 20% of its annual revenue.
Target also faced backlash in late May for its batch of merchandise celebrating Pride Month. She pulled some items from the collection after threats to employees. The retailer drew criticism from both those who opposed Target’s decision to carry the items, which it has done for years with little backlash, and those who questioned the move to take them off the shelves.
However, some other retail metrics are working in Target’s favor.
Retail sales for July were better than expected, according to new data from the Commerce Department on Tuesday. Home Depot on Tuesday reported a drop in sales, but it beat gains on Wall Street and spoke of a more resilient consumer. Amazon saw online and in-store sales jump in its most recent quarter, after it held its annual Prime Day event. Target had a competing online sale that overlapped with Prime Day.
Shares of Target closed at $125.05 on Tuesday. The company’s stock is down 16% year-to-date, far behind the 15% gain for the S&P 500.
This story is evolving. . Please check back for updates
“Infuriatingly humble alcohol fanatic. Unapologetic beer practitioner. Analyst.”