Cornell: "We're confident in our holiday season plans"
MINNEAPOLIS — Target Corp.’s third quarter sales and earnings beat expectations, and the company said it is upbeat about its prospects for the holiday season.
But the company’s fourth quarter profit outlook disappointed Wall Street, sending its shares down in early trading on Wednesday. Target forecast adjusted earnings of $1.05 to $1.25 per share for the fourth quarter, which was below the average analyst estimate of $1.24, according to Reuters. Target expects same-store sales in the fourth quarter to range from flat to up 2%.
The highlights of Target’s third quarter include the fact that comparable traffic grew by 1.4%, comparable sales increased by 0.9%, and comparable digital channel sales increased by 24%, on top of 26% growth in last year’s third quarter. The company said that its earnings per share for the quarter were at the high end of the guidance range.
Target also said it devoted $847 million to capital investment in the quarter, paid dividends of $339 million, and returned $171 million through share repurchases.
“We’re very pleased with Target’s third quarter performance, including traffic and sales growth that demonstrate we’re building on the progress we saw in the first half of the year,” said Target chairman and CEO Brian Cornell. “The investments we’re making in our business will help Target drive long-term success and ensure we’re well positioned to deliver for guests in the all-important holiday season.”
Cornell pointed to a Target assortment that has been bolstered with thousands of new items and the eight exclusive brands the company has launched this year, including the new Hearth and Hand with Magnolia home goods collection developed in partnership with Chip and Joanna Gaines. He added that Target shoppers will experience elevated in-store service as a result of the company’s investments in wages, training and additional hours for our team.
“And they’ll find more value than ever before through a combination of being priced right daily and offering impressive deals,” Cornell said. “While we expect the fourth-quarter environment to be highly competitive, we are very confident in our holiday season plans.”