Target Lifts FY24 Earnings View After Q2 EPS Beats Market; Stock Climbs In Pre-market

(RTTNews) - General merchandise retailer Target Corp. (TGT) on Wednesday issued third-quarter outlook and raised fiscal 2024 earnings view after reporting higher second-quarter earnings above market estimates. Meanwhile, the company now projects annual comparable sales at lower half of outlook range.

In pre-market activity on the NYSE, Target shares were climbing around 15.1 percent to trade at $164.88.

Outlook

For the third quarter, the Company expects earnings, on a reported and adjusted basis, of $2.10 to $2.40 per share with a 0 to 2 percent increase in its comparable sales.

Analysts on average expect the company to report earnings of $2.24 per share for the quarter, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

Further, for fiscal 2024, Target now expects earnings, on a reported and adjusted basis, of $9.00 to $9.70, higher than the prior range of $8.60 to $9.60.

The Street is looking for earnings of $9.28 per share for the year.

Regarding its forecast for comparable sales, Target now said the annual guidance range of a 0 to 2 percent increase remains appropriate, but it now believes the increase will more likely be in the lower half of that range.

Q2 Results

In its second quarter, Target's earnings increased from the same period last year and beat the Street estimates.

The company's bottom line came in at $1.192 billion or $2.57 per share, higher than $835 million, or $1.80 per share last year. Analysts had expected the company to earn $2.18 per share.

The company's revenue for the quarter rose 2.6 percent to $25.021 billion from $24.384 billion last year. Analysts expected revenues of $25.2 billion.

Comparable sales increased 2 percent in the second quarter, reflecting a comparable store sales increase of 0.7 percent and a comparable digital sales increase of 8.7 percent.

Brian Cornell, chair and chief executive officer, said, "We made a commitment to get back to growth in the second quarter, and the team delivered, all while expanding operating margins and growing EPS by more than 40 percent compared to last year. Importantly, our growth was driven entirely by traffic in stores and our digital channels, with double-digit growth in our same-day delivery services."

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