Target Q4 Results Top Estimates; Provides Rosy Outlook

(RTTNews) - Discount retailer Target Corp. (TGT) reported Tuesday that profit for the fourth quarter surged 57.8 percent from last year, driven by improved gross margins and revenue growth. Both earnings per share and quarterly revenues topped analysts' estimates. The company also provided rosy outlook for the full-year 2024.

In Tuesday's trading session on the NYSE, Target shares are up $12.65 or 8.41 percent to trade at $163.14.

"Our team's efforts changed the momentum of our business, further improving our sales and traffic trends in the fourth quarter while driving profitability well ahead of expectations," said Brian Cornell, chairman and chief executive officer of Target.

For the fourth quarter, net earnings surged to $1.38 billion or $2.98 per share from $876 million or $1.89 per share in the year-ago quarter, benefited from an additional week of sales in the latest quarter.

On average, 27 analysts polled by Thomson Reuters expected the company to report earnings of $2.22 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter grew 1.7 percent to $31.92 billion from $31.40 billion in the same quarter last year, reflecting a sales growth of 1.6 percent and a 9.8 percent increase in other revenue. Analysts expected revenues of $29.33 billion for the quarter.

Total comparable sales decreased 4.4 percent in the quarter, as comparable store sales declined 5.4 percent and comparable digital sales declined 0.7 percent. Comparable sales and traffic trends improved sequentially for the second quarter in a row.

Gross margin improved 290 basis points to 27.6 percent, reflecting lower markdowns and other inventory-related costs, lower freight costs, lower supply chain and digital fulfillment costs, and favorable category mix.

Looking ahead to the first quarter, the company expects earnings and adjusted earnings in the range of $1.70 to $2.10 per share on a comparable sales decline of 3 to 5 percent. Analysts' expect earnings of $1.93 per share for the quarter.

For fiscal 2024, the company now projects earnings and adjusted earnings in the range of $8.60 to $9.60 per share on a comparable sales growth of flat to 2 percent. The Street is looking for earnings of $8.44 per share for the year.

The company said it will roll out fresh innovations, including the new Target Circle membership program, as part of its roadmap for growth aimed at meeting consumers where they are, reigniting sales, traffic and market share gains, and positioning Target for profitable growth in 2024 and beyond.

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