Target Misses Q4 Earnings Expectations, Shares Down 4.46%

On Tuesday, Target Corporation posted their fourth quarter earnings report that missed analysts expectations. Shares of Target were then down by almost 5% during the most recent trading session after their earnings report. The American retailer company delivered a fourth quarter holiday earnings that were below estimates.

Fourth Quarter Earnings Report

Despite expanding continuously last year, the earnings of the Minneapolis-based retail chain have slightly fell short of expectations. The company which has started refurbishing its branches since last year have also launched a number of exclusive and apparel brands. These efforts was expected to drive more customers and push in-store sales higher.

For the quarter that ended last February 3, Target posted an adjusted earnings of $1.37 per share slightly missing expectations of $1.38 per share in terms of earnings. On the other hand, Target beat revenue expectations of $22.5 billion when it posted $22.8 billion in revenue 

Same-store sales of the company was up by 3.6% for the fourth quarter with an increase of 3.2% in their traffic. While the company slightly missed most expectations, Tesla was still able to record a robust holiday sales with overall sales growth of the company hitting around 4% during January alone.

Net income of the company for the fourth quarter came in at $1.1 billion or $2.02 per share which is higher than their net income of $817 billion during the same period a year ago. Sales of the company from their online platform have jumped by 29% for the holiday quarter which pushed the sales of the company up by 25%.

Target currently is pushing through with launching new brands on its stores as well as remodeling its branches. The company is also planning to increase its product offerings even offering an added range of produce and fresh food as well as to-go options which is set to place the company at par with Amazon whose acquisition of Whole Foods have increased their product range.

Capital Investment Expansion

During the earnings report, Target also made a number of announcements. This includes plans of the company to invest around $7 billion in its businesses in the next two years which will include plans to increase hourly wages for employees from $11 to $12 set to start this spring. By the year 2020, the company is expecting hourly wages to become as much as $15.

Target chief executive officer Brian Cornell stated that the company is also increasing its investment in its team which also happens to be one of their biggest investments recently. 

After the growth of the company’s digital or online sales, Target is also planning to expand its online platforms which will improve the shopping experience of online customers which will drive growth on the website of the company. Target is also planning to offer pickup of items for online shoppers as well as boost its delivery service. During the end of 2017, the company has acquired Shipt, a delivery service for $550 million as a part of its efforts in boosting its supply chain and increasing the number of ways to deliver the items ordered by their shoppers at a fast period of time. Target also acquired Grand Junction, a transportation technology company last year.

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