Target (TGT) and Staples (SPLS) released their latest earnings reports before opening bell this morning, with both posting results that were about as expected. Target posted adjusted earnings of 86 cents per share, which matched the consensus estimate. Revenue was $17.6 billion, which again was in line with consensus. In last year’s third quarter, Target reported adjusted earnings of 79 cents per share and $17.3 billion in revenue.
Staples posted adjusted earnings of 35 cents per share, which was in line with the consensus estimate, on $5.6 billion in revenue, which came out just slightly lower than the expectation of $5.67 billion. In last year’s third quarter, the office supply retailer reported adjusted earnings of 37 cents per share and revenue of $5.96 billion.
Target performs at the top of expectations
Target’s GAAP earnings were 87 cents per share, which was significantly ahead of last year’s 55 cents per share. This year’s net earnings included a benefit of 11 cents per share in connection to investment losses in Canada, while last year’s result included a negative impact of 27 cents per share due to those losses.
The big box retailer said comparable store sales grew 1.9% year over year, which was toward the high end of management’s expectations. Traffic grew 1.4% and was the main driver of the increase in comparable sales. Target’s signature categories of Style, Baby, Kids and Wellness increased by more than 2.5 times the company average. Digital channel sales rose 20% year over year and contributed 0.4 percentage points to overall comparable sales.
Target management said they now expect adjusted earnings to be between $4.65 and $4.75 per share. The previous guidance was a range of $4.60 to $4.75 per share. For the fourth quarter, they expect between $1.48 and $1.58 per share in adjusted earnings, compared to last year’s $1.49 per share.
Shares of Target edged upward by as much as 2.89% in premarket trades following the earnings report.
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