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Target Beats Q4 Projections, but Sees Some Softness Headed Into the New Fiscal Year

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Target Corp. came out of the holiday season with some good cheer.  “Our team grew traffic and delivered better-than-expected sales and profitability in our biggest quarter of the year,” said Brian Cornell, chair and chief executive officer, in a statement. “Results were led by strong performance in beauty, apparel, entertainment, sporting goods and toys.”  But while the company — which has been struggling to find its footing — is expecting continued growth this year, the first quarter started off on a weaker note with a sales decline in February and tariff uncertainty pressuring profits.  Related Articles Financial Warby Parker Makes the Jump to Target Retail Target Strikes Strategic Partnership With Champion, Offering Activewear and Sporting Goods Fourth-quarter net income fell 20.2 percent to $1.1 billion, or $2.41 a diluted share, from $1.4 billion, or $2.98, a year earlier.  You May Also Like Still, that put profits per share 16 cents ahead of the $2.25 analysts forecast. Sales for the three months ended Feb. 1 slipped 3.1 percent to $30.9 billion, but were up against a year-ago quarter that included an extra week.  Comparable sales grew 1.5 percent with gains in both store traffic and online. The company noted that comp sales in apparel and hardlines accelerated by nearly 4 percentage points compared with the third quarter, showing some momentum in the categories.   That signals that apparel, which comped down less than 1 percent in the third quarter, has returned to growth. For the full year, Target’s sales slipped 0.8 percent to $106.6 billion while comp sales inches up 0.1 percent. Beauty was the standout again with a midsingle digit comp increase.  But this year is getting off to something of a slower start on the profit front, even if the annual outlook is positive.  Target said: “In light of ongoing consumer uncertainty and a small decline in February net sales, combined with tariff uncertainty and the expected timing of certain costs within the fiscal year, the company expects to see meaningful year-over-year profit pressure in its first quarter relative to the remainder of the year. This year, earnings per share are expected to range from $8.80 to $9.80 for the year, straddling the $9.27 Wall Street had penciled in. Sales are slated to grow by about 1 percent. Brian Cornell, chair and CEO of Target. Courtesy Cornell said: “As we look ahead, our continued investments in digital capabilities, stores and supply chain — combined with a focus on newness, value, speed and reliability — will further differentiate our one-of-a-kind physical and digital shopping experience. Consumers continue to be drawn to the everyday discovery and delight that only Target can deliver, and we’re committed to leveraging our strategy, scale and unique position in retail to build on this distinct competitive advantage and drive long-term profitable growth.” The CEO will be in New York with top management on Tuesday to meet with investors and the media and lay out the company’s vision for 2025.

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