General merchandise retailer Target (NYSE: TGT) will be reporting earnings this Wednesday morning. Here’s what to look for.
Target beat analysts’ revenue expectations last quarter, reporting revenues of $25.44 billion, up 6.7% year on year. It was an exceptional quarter for the company, with a beat of analysts’ EPS estimates and an impressive beat of analysts’ gross margin estimates.
Is Target a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting Target’s revenue to grow 3.7% year on year, improving from its flat revenue in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Target has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at Target’s peers in the non-discretionary retail segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Grocery Outlet delivered year-on-year revenue growth of 1.1%, beating analysts’ expectations by 2.1%, and Sprouts reported revenues up 4.7%, in line with consensus estimates. Grocery Outlet traded up 6.2% following the results while Sprouts was also up 9.7%.
Read our full analysis of Grocery Outlet’s results here and Sprouts’s results here.
Investors in the non-discretionary retail segment have had steady hands going into earnings, with share prices up 1.8% on average over the last month. Target is up 8.3% during the same time and is heading into earnings with an average analyst price target of $143.87 (compared to the current share price of $151.12).
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