Target Shares Plunge 20% to One-Year Low After Biggest Earnings Miss and Profit Outlook Cut

Nov 20, 2024, 11:42 AM

Target Corp. reported its largest earnings miss in two years for the third quarter and cut its full-year profit outlook, sending its shares down as much as 20% to a one-year low. Adjusted earnings per share were $1.85, below the estimated $2.30, while revenue came in at $25.23 billion, missing the forecasted $25.74 billion. Net income declined 12.1% year-over-year. Comparable sales rose by 0.3%, against an estimated increase of 1.48%, with digital sales up 10.8% and store sales down 1.2%. Gross margin was 27.2%. Inventory increased 2.9% to $15.17 billion. The retailer reduced its full-year adjusted EPS guidance to $8.30 to $8.90 from a previous range of $9 to $9.70 and projected fourth-quarter adjusted EPS of $1.85 to $2.45, below analysts' expectations of $2.65. Target cited softer demand for discretionary products and cost pressures, noting that consumers are budget-conscious and cautious with spending. Despite the weak overall performance, beauty comparable sales grew over 6%.