Eric White’s Post

Target raised its full-year profit forecast on Wednesday and posted its first increase in quarterly comparable sales in over a year, driven by price cuts that attracted more shoppers to its stores. Shares of the Minneapolis-based retailer rose 16%, touching a near four-month high of $167.40. The stock was set for its best day in over nine months after the chain said it expects 2024 profit in the range of $9.00 to $9.70 per share, up from its prior forecast of $8.60 to $9.60. Analysts and industry watchers said the retailer's results show that while U.S. consumers are constrained, they are not in recession mode. However, it also indicated that they are willing to hold out for whoever offers the best discounts and are increasingly being driven by banner events and occasions. "The consumer is feeling nervous and pinched, and that will weigh on overall spending, but consumers still have plenty of purchasing power. They're just being picky about where they spend," said Brian Jacobsen, chief economist at Annex Wealth Management. For Reuters with Siddharth Cavale #Target #Reuters #Walmart #America #Consumer #Discounts #Deals

Target's shares increased by over 15% following a positive earnings report, indicating a reversal of a sales slump. The company reported a 2% rise in comparable sales for the second quarter, marking its first increase in over a year. Store traffic grew by 3%, compensating for a 0.9% decline in average transaction spending, attributed to lower prices. CEO Brian Cornell highlighted consumer resilience despite ongoing economic challenges. The earnings report reflects broader consumer spending trends, with other retailers like Walmart and Costco also reporting strong sales growth. Target's sales of discretionary goods, particularly in apparel and beauty, showed improvement, aided by new product launches. The company implemented price reductions on 5,000 items, contributing to increased customer traffic. Target's revenue reached $25.5 billion, exceeding expectations, with a net profit of $1.2 billion, a 43% year-on-year increase. The operating profit margin improved to 6.4%, surpassing the company's long-term goal of 6%. Target raised its earnings forecast for the fiscal year, reflecting confidence in sustained sales growth. #target #usretail #usconsumer #retailsales

https://lnkd.in/eWpeMzqU Target on Tuesday reported a 58% increase in fiscal fourth-quarter profits that handily beat Wall Street expectations as the discounter cut costs while keeping its inventory lean. Revenue rose slightly from a year ago and also topped analysts’ projections. Comparable sales — those from stores or digital channels operating at least 12 months — slipped 4.4%. But that was a smaller decline than the 4.9% drop in Target’s third quarter and a 5.4% drop in the second quarter. The Minneapolis retailer offered a cautious outlook for its sales and profits. The results came out just hours ahead of Target’s annual investor meeting that should offer clues about its strategies for improving sales to customers being squeezed by inflation and high borrowing costs. Target is more vulnerable than Walmart and other big box discounters. More than 50% of its annual sales come from discretionary items like toys, fashion and electronic gadgets. More updates to come. See my story. The Associated Press #target

“Target (TGT.N) raised its full-year profit forecast on Wednesday and reported its first increase in quarterly comparable sales in over a year, driven by price cuts that attracted more shoppers to its stores.” “Shares of the Minneapolis-based retailer rose 16%, touching a near four-month high of $167.40. The stock was set for its best day in over nine months after the chain said it expects 2024 profit in the range of $9.00 to $9.70 per share, up from its prior forecast of $8.60 to $9.60.” “Second-quarter comparable sales, or sales from online and stores open at least 12 months, rose 2% in the quarter ended Aug. 3, the first rise in over a year. Analysts on average estimated a 1.15% rise in comparable sales, according to LSEG.” “Traffic drove all its gains in comparable sales as price cuts on thousands of items proved to be a powerful lure for shoppers who have been dealing with a rapid rise in grocery prices and interest rates, the company said.” “Analysts and industry watchers said the retailer's results show that while U.S. consumers are constrained, they are not in recession mode. However, it also indicated that they are willing to hold out for whoever offers the best discounts and are increasingly being driven by banner events and occasions.” "”The consumer is feeling nervous and pinched, and that will weigh on overall spending, but consumers still have plenty of purchasing power. They're just being picky about where they spend," said Brian Jacobsen, chief economist at Annex Wealth Management.” “Rising prices of food and items made for immediate consumption since the pandemic have led Americans to prioritize spending on groceries and everyday essentials, while cutting back on purchases of apparel, electronics, and home goods, which are key categories for Target.” “Target ran its Circle Week sales event in July, with an early focus on back-to-school products, which stimulated interest among shoppers, driving online sales up 8.7% in the quarter.” - Ananya Mariam Rajesh, Siddharth Cavale

Was Walmart’s strong quarter a positive signal for the economy? Walmart reported a strong quarter today, with its share price up +6.5%.  The market clearly sees this as a positive sign for consumer strength and the broader economy.  It wasn’t the only good news (CPI under 3%), but personally I was a bit surprised by the enthusiasm, especially the positive spillover to Target, which saw a +4.3% bump. I don’t follow retailers as closely as I follow their CPG suppliers, but I’ve always thought Walmart and Target's results are just as likely to diverge as they are to align. Target caters to a more upscale demographic, while Walmart serves a broader range of income levels, including middle and lower-income households. Walmart also has a much larger grocery and household staples mix vs. Target, whose assortment tilts more discretionary. Typically, when the economy is thriving, I see Target outperform as consumers “trade up.” Conversely, when budgets tighten, Walmart shines by helping shoppers stretch their dollars. Given today’s strong positive movement in both stocks, I decided to test this theory. Over the last two years, Walmart and Target’s daily stock prices have a slightly negative correlation (-0.13). Over five years, the correlation is slightly positive (+0.14). In plain terms, TGT and WMT move independently, despite being direct competitors in the same industry with exposure to the same macro-economic environment. So, what does Walmart’s strong quarter really tell us? Does it signal a healthy economy, or could it indicate that consumers are still feeling the pinch and turning to Walmart to manage tighter budgets? As it happens, Target reports earnings next week, so we don’t have long to wait for more evidence. I hope the market’s optimism is well-placed, and that both companies (and their consumers) are thriving.  But I am not as convinced as the market seemed to be today. What do you think - are consumers doing well, or are they still feeling the effects of a three-year inflation spike?

Target reported a rather soft first quarter, with declines in sales and revenue that reflect overall shopping habits. Although the retailer didn’t open the year with a bang, it is setting up for growth later in the year through new initiatives and, hopefully, in a more conducive selling environment. For the quarter ending May 4, comparable sales slid 3.7%, a rate that Target noted was in line with its expectations. Sales came in around $24.13 billion for the period, below the $24.94 billion reached in the first quarter of 2023. Revenue was down a similar 3.1$ to $24.54 billion. Delving into the data, Target’s Q1 performance shows where consumers are reining in their spending and where pockets of growth remain. For example, the apparel category fared relatively well in the quarter, while shoppers’ perceptions of inflation caused them to spend more cautiously in other discretionary segments. Within essentials, sales in food and beverages dipped by low single digits, as shoppers continue to shop across retail channels for value and savings. Meanwhile, the retailer's e-comm channel experienced an uptick, following Target’s ongoing investments in this area. Digital sales comps went up 1.4% and same-day services climbed nearly 9%, with particular strength in drive-up service.| Progressive Grocer https://lnkd.in/grTpHgsh #retail #supermarkets #grocery #earnings #inflation #digital #retailer

After Walmart’s strong Q2 report last week, I was wondering how Target would perform. As I discussed in a recent post, the two companies’ results are just as likely to move inversely as they are in tandem and understanding that movement can reveal a lot about consumer behavior and the broader economy. Today, Target delivered. The company reported a very strong quarter, exceeding analysts’ expectations and raising guidance for the year. Comp sales rose +2% in the quarter (+.7 in-store and +8.7 digital), which was a turnaround from -1.9% in the prior quarter and declines over the prior year.  Price cuts drove traffic +3%, so we can infer basket was down as the company used discounts to attract inflation-weary shoppers.  Gross margins were up as cost savings, mix and inventory management all helped offset discounting. CEO Brian Cornell, noted “improving trends across our discretionary categories, most notably in apparel, and we're seeing continued strength in beauty.” Walmart was encouraging last week, but I withheld judgement – knowing that sometimes WMT does well because the consumer is struggling.  Today, TGT provided the confirmation I needed – the consumer is doing fine, and the soft-landing theory of the economy is alive and well. For those interested in the details, I’ve placed the full release in the comments.

Total revenue fell 3.1% to $24.53 billion, just ahead of estimates of $24.52 billion. Sales declines, primarily in discretionary categories, were partially offset by continued growth in beauty, Target noted. Comparable sales fell 3.7%. Comp-store sales were down 4.8%, which was partially offset by a 1.4% increase in comparable digital sales. The number of transactions fell 1.9%. The average transaction amount fell 1.9%. “Our first quarter financial performance was in line with our expectations on both the top and bottom line, tracking the trajectory we outlined for this year and setting up a return to growth in the second quarter," said Target CEO Brian Cornell. "Our topline performance improved for the third consecutive quarter, with growth in our digital business led by strength in our same-day fulfillment services.”