Target beat estimates to have a positive third quarter (Q3) earnings report. The store had high revenue, but the retailer’s stock still dropped after the release of its Q3 profits.
Target beats retail curse
In contrast to other struggling retailers like Sears, Target performed well and had a Q3 revenue of $17.82 billion, an increase from $16.87 billion from 2017. Same-store visits also grew 5.1%, another good sign in the age of online shopping.
Chief executive officer (CEO), Brian Cornell, noted that many customers are making ‘Target runs’ to conduct quick errands. Transactions in the store jumped 5.3%.
‘People are coming to our stores,’ noted Cornell.
While customers are visiting Target stores, they’re also shopping online. Digital sales surged by 49% in Q3.
Target misses with earnings per share
While Target has more revenue, earnings per share (EPS) were a disappointment. The chain’s EPS were $1.09, less than the $1.12 that financial experts expected. The store also decreased in profit margins, because of its investment in online sales and wage increases for employees.
Target’s Q4 outlook
Despite the diminished returns, Cornell had an optimistic outlook for Target’s Q4 earnings. He believes that a wide variety of products and options to purchase items will help the corporation in the future.
‘We've made significant investments in our team heading into the holidays and they are ready to serve our guests with a comprehensive suite of convenient delivery and pickup options, a wide range of new products and unique gift ideas and a strong emphasis on low prices and great value. We plan to leverage our current momentum into 2019, when we'll achieve greater scale across the full slate of our initiatives - creating efficiencies and cost-savings, further strengthening our guest experience and positioning Target for profitable growth in the years ahead, ‘ said Cornell.