Target Inc (NYSE: TGT) is in the green this morning after reporting market-beating results for its fiscal first quarter.
Pro shares her view on Target stock
The retail stock is trending up also because the company reiterated its guidance for the full year. Target is now calling for a 0.7% increase in its comparable sales this year on $7.75 a share to $8.75 a share of adjusted per-share earnings.
In comparison, analysts were at 0.6% and $8.36 a share, respectively. On CNBC’s “Squawk Box”, Hightower’s Stephanie Link said:
There were some positives and some negatives. [But] the stock trades at 18 times compared to Walmart at 25 times. I think maybe they’re getting back on track. So, I’m pleased.
The second-quarter outlook, though, came in shy of estimates. Versus its year-to-date high, Target stock is still down more than 10% at writing.
Target Q1 earnings snapshot
Earned $950 million versus the year-ago $1.01 billion
Per-share earnings also declined from $2.16 to $2.05
Adjusted EPS printed at $2.05 as per the press release
Revenue edged up 0.6% year-on-year to $25.32 billion
Consensus was $1.77 a share on $25.26 billion revenue
What else was noteworthy in the earnings print?
Gross margin improved 70 basis points to 27.4% on the back of a 0.4% decline in cost of sales. According to Stephanie Link:
They’ve made massive strides in inventories. When you have sales up and inventories down, that’s a pretty good combination. Gross margins are improving because freight costs are down substantially.
Inventory was down 6.5% sequentially and 16.4% versus the same quarter last year. Wall Street currently has a consensus “overweight” rating on the Target stock.
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