Third quarter 2021 target profit (TGT) exceeded


Target stocks fell on Wednesday as the big box retailer chose to focus on value as prices for groceries, fuel and other goods rise.

Shares fell about 4% in pre-market trading, despite exceeding earnings expectations for the fiscal third quarter.

Target CEO Brian Cornell said on a call with reporters that the company is absorbing some of the higher costs it experiences, rather than passing them on to customers. This strategy could reduce margins.

“We are protecting the prices,” he said. “It’s as important to our guests this year as safety has been throughout the pandemic.”

Sees higher holiday sales

Target beat analysts’ forecasts as sales jumped 13% after shoppers bought Halloween costumes, stocked up on back-to-school supplies and started searching for holiday gifts earlier.

He also raised his guidance for the fourth quarter, predicting comparable sales could increase between single-digit and double-digit pace during the holiday season. Previously, he estimated a high single-digit increase.

Here’s what Target reported for the fiscal third quarter ended Oct. 30, compared to Refinitiv’s consensus estimates:

  • Earnings per share: $ 3.03 adjusted vs. $ 2.83 expected
  • Revenue: $ 25.65 billion versus $ 24.78 billion

Net income jumped to $ 1.49 billion, or $ 3.04 per share, from $ 1.01 billion, or $ 2.01 per share, a year earlier. Excluding items, the retailer earned $ 3.03 per share, higher than the $ 2.83 per share expected by analysts polled by Refinitiv.

Total revenue rose 13% to $ 25.65 billion from the same period a year ago, slightly above analysts’ expectations of $ 24.78 billion.

Comparable sales in the third quarter rose 12.7% as shoppers made more trips to Target stores and visits to its website. That exceeded the 8.2% increase expected by analysts, according to a StreetAccount poll.

Comparable store sales increased 9.7%, while digital comparable sales increased 29%. (These metrics increased 9.9% and 155%, respectively, in the quarter of last year.)

Target said sales through its same-day services – which include curbside pickup, Drive Up, in-store pickup of orders called Pickup, and Shipt home delivery service – increased by nearly 60%. % during the quarter. This is in addition to growth of over 200% over the period last year.

“Key moments of the season”

Cornell said sales were strong throughout the year, but were “punctuated during key seasonal times”. He said he expects this pattern to happen again during the holidays, as consumers shop for toys, decorations and food.

Target is ready for the holidays, Cornell said. He explained that the retailer has been creative in making sure items get to stores and warehouses on time, despite the blocked ports. It has contracted some of its own ships, unloaded around 60% of its containers during off-peak hours, and sent more of its cargo to less busy ports in Georgia, Virginia or the Pacific Northwest.

This led to an almost 20% or $ 2 billion year-over-year increase in inventories, he said.

The target has started its first holiday offers in early October and promised price matches for early risers. He said the company was increasing its operations by hiring 100,000 seasonal workers, filling 30,000 new roles in the supply chain and giving around 5 million hours of overtime to existing staff.

“The holiday season has started well, but we have many weeks ahead of us and believe we will continue to see this force throughout the holiday season until Christmas Eve,” said Cornell.

As of Tuesday’s close, shares of Target have risen about 51% this year. The shares closed at $ 266.39 on Tuesday, bringing the retailer’s market value to $ 130.01 billion.

Read the company’s press release here.