Skip to main content

A shopper looks at a sales flier duringat a Target store in Chicago, in this file photo.JIM YOUNG/Reuters

Target Corp's quarterly comparable sales beat analysts' estimates, helped by higher traffic and strong demand for goods in its higher-margin signature categories, which include apparel, products for children, and health and wellness items.

The retailer, whose shares were up 1.2 per cent at $74.89 (U.S.) in early trading on Wednesday, also forecast a higher-than-expected adjusted profit for the full year.

Wal-Mart Stores Inc, Target's biggest rival, reported sales below market estimates last week, hurt by falling food prices and slugglish demand for clothes as well as a strong dollar.

Unlike Wal-Mart, Target has no international operations since its failed foray into Canada.

"Given the toughness of the market and the much worse performance from Walmart and department store rivals, the comparable sales uplift is very respectable," Neil Saunders, chief executive of research firm Conlumino, wrote in a note.

Comparable sales of apparel increased by a low single-digit percentage, helped by better in-store and online presentation and the stocking of trendier styles, Chief Financial Officer Cathy Smith said on a call with reporters.

Target's performance in apparel contrasted with weak sales by several other retailers during the holiday shopping season.

Macy's Inc and Nordstrom Inc were among those blaming unseasonably warm weather in November and December for a fall in demand.

"We believe that Target performed somewhat above the market (in apparel) thanks to its more fashion-savvy shopper demographic and its strong marketing efforts around holiday looks and outfit advice," Saunders said.

Sales at Target stores open at least 13 months increased 1.9 per cent in the fourth quarter ended Jan. 30, beating the 1.5 per cent expected by analysts polled by research firm Consensus Metrix.

Target, led by Chief Executive Brian Cornell since August, has been promoting and investing in a narrower set of higher-margin products, and comparable sales in those categories grew by more than three times the company average in the quarter.

Target reported a net profit of $1.43-billion, or $2.32 per share, compared with a loss of $2.64-billion, or $4.10 per share, a year earlier.

Excluding items, the retailer earned $1.52 per share, below the average analyst estimate of $1.54, as it spent more on promotions.

Total sales fell 0.6 per cent to $21.63-billion. Analysts had expected sales to remain flat at $21.75-billion, according to Thomson Reuters I/B/E/S.

Target forecast a full-year adjusted profit of $5.20-$5.40 per share, above the average analyst estimate of $5.16.

Report an editorial error

Report a technical issue

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 1:21pm EDT.

SymbolName% changeLast
JWN-N
Nordstrom
+1.05%20.13
TGT-N
Target Corp
+0.47%175.49
TRI-N
Thomson Reuters Corp
-0.4%155.32
TRI-T
Thomson Reuters Corp
-0.34%210.96
WMT-N
Walmart Inc
-0.54%60.39

Interact with The Globe