A customer shops at a Target store in Miami, Florida, May 20, 2024.
Joe Raedle | Getty Images
Objective will report its fiscal first-quarter earnings on Wednesday, just days after announcing it would cut prices on thousands of groceries and everyday items.
The Minneapolis retailer has set low expectations for the coming year. In early March, the company said it expected comparable sales to be flat to 2% and adjusted earnings per share for the full year to be between $8.60 and $9.60.
Here’s what Wall Street expects from the company, based on a survey of analysts conducted by LSEG:
- Earnings per share: $2.06
- Income: $24.52 billion
This would represent a decline in sales from $25.32 billion in the same quarter last year.
Like other retailers, Target has had to grapple with consumers still not spending as freely on clothing, home goods and other discretionary items due to price fatigue. The low-cost, chic retail chain has been particularly hurt by this animated because its sales consist of less food than rival Walmart, which makes about 60% of its U.S. sales from groceries. For comparison, at Target it’s about 20%.
Inflation declined slightly in April, but the Consumer Price Index still rose 3.4% year-on-year. The key metric is measuring the cost of goods and services at the cash register.
Walmart last week it beat Wall Street expectations for earnings and revenue, reporting double-digit e-commerce growth and saying it was gaining market share from higher-income shoppers. The company’s chief financial officer, John David Rainey, also said customers are turning to store shelves for cheaper meals because brisk food is so exorbitant.
Some of Walmart’s newer or more repeated customers may come from Target.
Target acknowledged consumer fatigue with inflation — and competition from discounters like Walmart, Aldi and others — with price cuts earlier this week. Target says it concentrates most of its discounts on basic groceries, including milk, meat, bread, fruits and vegetables, as well as paper towels and diapers.
Need to update: Target shares closed at $TK on Tuesday, bringing its market value to $TK. Since Tuesday’s close, Target shares are up/down TK%, lagging/leading the S&P 500.
