TGT stock is in the red today after Target Corporation (NYSE:TGT) reported mixed fourth-quarter earnings, despite seeing solid growth in the e-commerce section of its business.
For the fourth quarter, Target saw earnings outpace analysts’ expectations, but revenue fell short due to weak sales of toys, electronics, and home goods over the holidays. Adjusted earnings per share came in at $1.69 versus the expected figure of $1.65. Revenue came in at US$23.4 billion, which missed the US$23.5 billion that had been expected. Net income for the quarter grew from US$799 million to US$834 million; however, TGT stock is trading down around 3% on Tuesday.
Investors may take some solace from sales at stores open at least a year rising 1.5%, in line with expectations. Target has had 11 consecutive quarters of growth at stores opened at least a year. The company has been investing heavily in its stores in a bid to stave off competition for e-commerce giant Amazon (NASDAQ:AMZN), while also reporting a 20% increase in its own digital sales.
TGT stock is currently trading for $105.84.
Target said same-day services were a major driver in the quarter, with the retailer offering same-day pickup in-store and by drive-up and has same-day delivery of packages through Shipt. The company said those same-day services accounted for more than 80% of its comparable digital sales growth for the three months ended February 1.
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“The strategic investments we’ve made over the past several years to elevate the shopping experience, curate our multi-category assortment at scale, and deliver ease and convenience through our fulfillment capabilities are deepening our relationship with our guest,” said Target CEO Brian Cornell.
TGT stock has been on a tear over the last year, gaining almost 50% and bringing its market cap to US$55.3 billion. With the rest of the market in a panic over the outbreak of the coronavirus, the company said it does not expect the disease to have a large impact on its business, with “panic buying” emphasizing the continued importance of brick-and-mortar stores, according to Cornell.
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