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Digitization Strength Likely to Fuel Target's (TGT) Q2 Earnings
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Target Corporation (TGT - Free Report) is slated to release second-quarter fiscal 2021 numbers on Aug 18, before the market opens. Amid an evolving and challenging retail landscape, this general merchandise retailer has been focusing on store refurbishments, enhancing digital capabilities and expanding same-day fulfillment options, keeping in mind speed and convenience.
Digitization Helps Win Customers’ Wallet Share
Target, which is among the biggest winners amid the pandemic, has been deploying resources to enhance omni-channel capacities and adopt strategies to provide seamless shopping experience. Without doubt, the company’s improving digital sales is the reflection of the same. We note that in the last reported quarter digitally originated comparable sales surged 50.2%.
A significant number of customers now prefer online mode of transaction. This has been stimulating demand for efficient delivery and pickup services. Target has been making constant efforts to enhance shopping methods and techniques through miscellaneous channels, and these have been yielding results.
The company’s commitment to offer unique shopping experience with safe and convenient options has been driving performance. Some of these initiatives like contactless Drive Up and Order Pickup, and same-day delivery with Shipt are worth mentioning. Customers have been responding positively to such shopping tools. Quite obviously, the company has been ramping up investments in the wake of rising competition from the likes of Walmart (WMT - Free Report) , Dollar General (DG - Free Report) and Costco (COST - Free Report) .
In the last reported quarter, same-day services (Order Pick Up, Drive Up and Shipt) grew more than 90%. Sales fulfilled by Shipt surged nearly 86% year over year and sales through Drive-Up were up 123% during the quarter under review. Order Pickup rose 52% in the quarter.
Target Corporation Price, Consensus and EPS Surprise
Despite these upsides, we cannot overlook margins. Impact of costs associated with digital fulfilment, supply chain and COVID-19 related expenses cannot be ruled out. We note that costs related to additional employee payments and benefits, and investments undertaken to preserve safety and health of customers and team members amid the coronavirus crisis may have weighed on margins.
How Are Estimates Shaping Up?
The Zacks Consensus Estimate for Target’s second-quarter revenues is pegged at $25,066 million, indicating an improvement of 9.1% from the prior-year quarter. The consensus mark for earnings per share has increased 2.4% over the past seven days to $3.48. The figure suggests growth of roughly 3% from the year-ago period.
The combination of a positive Earnings ESP and a Zacks Rank #1, 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Bottom Line
Thanks to its one-stop shopping destination, customers have been opting Target amid the pandemic for its multi-category assortment of owned and exclusive brands as well as popular national brands.
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Digitization Strength Likely to Fuel Target's (TGT) Q2 Earnings
Target Corporation (TGT - Free Report) is slated to release second-quarter fiscal 2021 numbers on Aug 18, before the market opens. Amid an evolving and challenging retail landscape, this general merchandise retailer has been focusing on store refurbishments, enhancing digital capabilities and expanding same-day fulfillment options, keeping in mind speed and convenience.
Digitization Helps Win Customers’ Wallet Share
Target, which is among the biggest winners amid the pandemic, has been deploying resources to enhance omni-channel capacities and adopt strategies to provide seamless shopping experience. Without doubt, the company’s improving digital sales is the reflection of the same. We note that in the last reported quarter digitally originated comparable sales surged 50.2%.
A significant number of customers now prefer online mode of transaction. This has been stimulating demand for efficient delivery and pickup services. Target has been making constant efforts to enhance shopping methods and techniques through miscellaneous channels, and these have been yielding results.
The company’s commitment to offer unique shopping experience with safe and convenient options has been driving performance. Some of these initiatives like contactless Drive Up and Order Pickup, and same-day delivery with Shipt are worth mentioning. Customers have been responding positively to such shopping tools. Quite obviously, the company has been ramping up investments in the wake of rising competition from the likes of Walmart (WMT - Free Report) , Dollar General (DG - Free Report) and Costco (COST - Free Report) .
In the last reported quarter, same-day services (Order Pick Up, Drive Up and Shipt) grew more than 90%. Sales fulfilled by Shipt surged nearly 86% year over year and sales through Drive-Up were up 123% during the quarter under review. Order Pickup rose 52% in the quarter.
Target Corporation Price, Consensus and EPS Surprise
Target Corporation price-consensus-eps-surprise-chart | Target Corporation Quote
Other Trends
Despite these upsides, we cannot overlook margins. Impact of costs associated with digital fulfilment, supply chain and COVID-19 related expenses cannot be ruled out. We note that costs related to additional employee payments and benefits, and investments undertaken to preserve safety and health of customers and team members amid the coronavirus crisis may have weighed on margins.
How Are Estimates Shaping Up?
The Zacks Consensus Estimate for Target’s second-quarter revenues is pegged at $25,066 million, indicating an improvement of 9.1% from the prior-year quarter. The consensus mark for earnings per share has increased 2.4% over the past seven days to $3.48. The figure suggests growth of roughly 3% from the year-ago period.
Target has an Earnings ESP of +2.89% and a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The combination of a positive Earnings ESP and a Zacks Rank #1, 2 (Buy) or 3 increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Bottom Line
Thanks to its one-stop shopping destination, customers have been opting Target amid the pandemic for its multi-category assortment of owned and exclusive brands as well as popular national brands.