General merchandise retailer Target (NYSE:TGT) will be reporting earnings tomorrow before market hours. Here’s what to expect.
Target beat analysts’ revenue expectations by 1% last quarter, reporting revenues of $25.45 billion, up 2.7% year on year. It was a very strong quarter for the company, with an impressive beat of analysts’ gross margin estimates and a solid beat of analysts’ EBITDA estimates.
Is Target a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Target’s revenue to grow 2% year on year to $25.9 billion, a reversal from the 4.2% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.30 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Target has missed Wall Street’s revenue estimates twice over the last two years.
Looking at Target’s peers in the non-discretionary retail segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Sprouts delivered year-on-year revenue growth of 13.6%, beating analysts’ expectations by 3.7%, and Grocery Outlet reported revenues up 10.4%, in line with consensus estimates. Sprouts traded up 8% following the results while Grocery Outlet was also up 10.6%.
Read our full analysis of Sprouts’s results here and Grocery Outlet’s results here.
Investors in the non-discretionary retail segment have had steady hands going into earnings, with share prices flat over the last month. Target is up 4.4% during the same time and is heading into earnings with an average analyst price target of $173.47 (compared to the current share price of $157.60).
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