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Target (TGT) to Post Q2 Earnings: Digital Sales Likely to Aid
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Target Corporation’s (TGT - Free Report) second-quarter fiscal 2020 results, slated to release on Aug 19, are likely to reflect strength in digital sales, all the more due to customers’ increased shift to this mode of shopping amid coronavirus-led social distancing.
Increased demand for essential items amid the pandemic has been working well for Target’s Essentials and Food & Beverage categories. Further, increased stay-at-home trends to maintain social distance has led to an accelerated shift to online shopping and boosted the demand for home delivery. This is where Target’s solid initiatives to boost online sales and enhance deliveries come handy. These upsides, which bolstered the company’s digital sales in the last reported quarter, are likely to have benefited the second-quarter performance as well.
Amid the current circumstances, Target has been well equipped to serve shoppers through various efforts such as curbside pickup and delivery at home. The company has made significant headway in the same-day delivery race by acquiring Internet-based grocery delivery service, Shipt, to provide same-day delivery of groceries, essentials, home, electronics, toys and other products. Drive Up, an app-based service, is another initiative to expedite the shopping process. The service enables customers to place orders utilizing the Target app and have them delivered to their cars. We note that these services have been yielding results amid the pandemic. To top it, Target recently announced that it is adding 750 fresh and frozen grocery items to its in-store order pickup and curbside drive up online services.
Target Corporation Price, Consensus and EPS Surprise
We believe that such robust initiatives to support online purchasing and ease deliveries are likely to have aided Target in catering to the rising pandemic-induced demand for essentials. Other retailers like Walmart (WMT - Free Report) , Kroger (KR - Free Report) and Costco (COST - Free Report) are also gaining on such trends.
Meanwhile, the Zacks Consensus Estimate for Target’s second-quarter revenues is pegged at $19,907 million, indicating a rise of 8.1% from the figure reported in the year-ago quarter. The consensus mark for earnings has jumped 6.1% over the past seven days to $1.56 per share. However, this suggests a drop of 14.3% from the year-ago period’s reported figure.
Other Trends
Despite these upsides, we cannot overlook margins. Certainly, investments in pay and benefits for frontline team members, shift in channel mix toward digital fulfillment and any decline in the sales of higher-margin discretionary items are likely to have weighed on Target’s margins. Together, these are likely to get reflected in the second-quarter bottom line. (Read More: How is Target Poised Ahead of Q2 Earnings Release?)
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Target (TGT) to Post Q2 Earnings: Digital Sales Likely to Aid
Target Corporation’s (TGT - Free Report) second-quarter fiscal 2020 results, slated to release on Aug 19, are likely to reflect strength in digital sales, all the more due to customers’ increased shift to this mode of shopping amid coronavirus-led social distancing.
Increased demand for essential items amid the pandemic has been working well for Target’s Essentials and Food & Beverage categories. Further, increased stay-at-home trends to maintain social distance has led to an accelerated shift to online shopping and boosted the demand for home delivery. This is where Target’s solid initiatives to boost online sales and enhance deliveries come handy. These upsides, which bolstered the company’s digital sales in the last reported quarter, are likely to have benefited the second-quarter performance as well.
Amid the current circumstances, Target has been well equipped to serve shoppers through various efforts such as curbside pickup and delivery at home. The company has made significant headway in the same-day delivery race by acquiring Internet-based grocery delivery service, Shipt, to provide same-day delivery of groceries, essentials, home, electronics, toys and other products. Drive Up, an app-based service, is another initiative to expedite the shopping process. The service enables customers to place orders utilizing the Target app and have them delivered to their cars. We note that these services have been yielding results amid the pandemic. To top it, Target recently announced that it is adding 750 fresh and frozen grocery items to its in-store order pickup and curbside drive up online services.
Target Corporation Price, Consensus and EPS Surprise
Target Corporation price-consensus-eps-surprise-chart | Target Corporation Quote
We believe that such robust initiatives to support online purchasing and ease deliveries are likely to have aided Target in catering to the rising pandemic-induced demand for essentials. Other retailers like Walmart (WMT - Free Report) , Kroger (KR - Free Report) and Costco (COST - Free Report) are also gaining on such trends.
Meanwhile, the Zacks Consensus Estimate for Target’s second-quarter revenues is pegged at $19,907 million, indicating a rise of 8.1% from the figure reported in the year-ago quarter. The consensus mark for earnings has jumped 6.1% over the past seven days to $1.56 per share. However, this suggests a drop of 14.3% from the year-ago period’s reported figure.
Other Trends
Despite these upsides, we cannot overlook margins. Certainly, investments in pay and benefits for frontline team members, shift in channel mix toward digital fulfillment and any decline in the sales of higher-margin discretionary items are likely to have weighed on Target’s margins. Together, these are likely to get reflected in the second-quarter bottom line. (Read More: How is Target Poised Ahead of Q2 Earnings Release?)
Target currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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