Goal (TGT) earnings This fall 2022

A Target department store on June 07, 2022 in Miami, Florida. Target announced that it expects profits will take a short-term hit, as it marks down unwanted items, cancels orders and takes aggressive steps to get rid of extra inventory.

Joe Raedle | Getty Images

Target on Tuesday will report holiday-quarter results, as retailers brace for a year that appears poised to bring slower sales and more price-conscious customers.

Here’s what analysts are expecting for Target’s fiscal fourth quarter, according to consensus estimates from Refinitiv:

  • Adjusted earnings per share: $1.40 expected
  • Revenue: $30.7 billion expected

The big-box retailer, known for selling lower-priced, but fashion-forward clothing, home goods and more, saw sales spike during the first two years of the pandemic. Its annual total revenue grew by about $28 billion – or about 36% – from fiscal 2019 to 2021.

Yet over the past year, Target has faced a shift in both sales trends and market sentiment. The discounter has become a poster child in the industry for inventory troubles, squeezed profit margins and concerns about inflation-pinched, middle-income consumers. The company has missed Wall Street’s earnings expectations for three consecutive quarters and warned investors to expect soft holiday sales.

Target’s stock has fallen nearly 40% from its all-time closing high. It closed on Monday at $166.81 per share, bringing its market value to nearly $77 billion. So far this year, however, its shares are up about 12%, outpacing the almost 4% rise in the S&P 500.

Alongside its fiscal fourth-quarter results, Target is expected to share full-year guidance at an investor day in New York City.

So far, retailers have delivered cautious outlooks for the year ahead. Walmart said last week that it expects same-store sales to rise between 2% and 2.5% excluding fuel for its US business, with that growth coming from inflation rather than an increase in unit volume. elsewhere, HomeDepot missed revenue expectations for the first time since November 2019 and said it expects full-year sales growth to be roughly flat.

Target is more vulnerable than its archrival Walmart. Groceries account for just 20% of Target’s sales, while Walmart gets more than half of its sales from the frequency-driving category. It’s also well known for “Target runs,” or trips that inspire shoppers to fill up their baskets with discretionary items and impulse buys along with the item they went to the store for — a habit that may not hold as consumers return to busier schedules, spend money on restaurants and other services and keep a closer eye on their budgets.

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