Investing.com – US retail giant Target Inc. (NYSE:) earnings report was mixed.
Profits recorded 25.32 billion for the first quarter of 2023, while experts expected it to record 25.37 billion dollars. The company succeeded in achieving earnings per share of 2.05, higher than experts’ expectations, by recording $1.79.
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“We’ve come into 2023 aware of what consumers face as inflation continues and interest rates rise,” Target Chairman and CEO Brian Cornell said on a call with reporters.
He continued, “We are determined to build on the trust of our customers by uniting as one team to deliver affordable enjoyment every day as consumers and businesses face the third year in a row of dynamic challenges.”
It was not difficult to determine the impact of the various cross-cutting economic currents on an earnings announcement target .
Comparable digital sales were down 3.4% year over year. The company also bought back any of its shares in the first quarter.
The retailer also piped second-quarter earnings below analyst estimates, setting a cautious tone about the possible start of its prime back-to-school shopping season. However, Cornell remains optimistic that the second half of the year brings with it better news.
“I think the combination of visits that we’re seeing, the relationship that we’ve created with guests, the flexibility that the actions that we’ve taken around inventory provide us in the back half of the year, this great mix of new merchandise is on trend and the consistent trends that we’re seeing in food and beverage, household essentials , and Beauty gives us a lot of confidence that we can navigate a challenging consumer environment with the right agility and flexibility to continue to meet guest needs.” Connection.
Net sales: +0.6% yoy to $25.3 billion versus estimates of $25.18 billion
Gross profit margin: 26.3% vs. 25.7% a year ago and estimates at 26.52%
Inventory growth: -16% yoy vs -5.1% estimates
Diluted earnings per share: -6.2% yoy to $2.05 vs. estimates of $1.80
How is the stock trading now and what does the data mean for the US economy?
Target’s stock rose slightly before the opening, after the earnings announcement, as the stock rose 1.09% to $158.62.
The company said that total sales of Target rose 0.5% over the fourth quarter from last year. But digital sales have slumped, and the company said shoppers have pushed back on discretionary purchases in what Chief Executive Brian Cornell described as a “very difficult environment” for consumers.
Target (TGT) sales in stores open for at least one year increased 0.7%, and the company said customers are spending more on food and essentials. Earnings fell 5.8% in the quarter.
It’s the latest retailer to say shoppers have backed away from items like clothing and home goods and switched to groceries and essentials. Low- and middle-income consumers were pressured more by higher prices.
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