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Target (TGT) Lined Up for Q2 Earnings: What's in Store?
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Target Corporation (TGT - Free Report) is likely to report a decline in the top line when it reports second-quarter fiscal 2023 results on Aug 16 before market open. The Zacks Consensus Estimate for revenues is pegged at $25,556 million, indicating a decrease of about 1.9% from the prior-year reported figure.
The bottom line of this general merchandise retailer is anticipated to have increased year over year. Although the Zacks Consensus Estimate for earnings per share for the quarter under review has declined by a couple of cents to $1.48 over the past seven days, it suggests a sharp increase from earnings of 39 cents reported in the year-ago period.
Target has a trailing four-quarter negative earnings surprise of 4.9%, on average. In the last reported quarter, this Minneapolis, MN-based company’s bottom line outperformed the Zacks Consensus Estimate by 17.8%.
Key Things to Note
Consumer spending, a key catalyst for the economy, has shown signs of slowing down. Several factors have come into play, including underlying inflationary pressure, a higher interest rate environment and reductions in pandemic savings. Target might have witnessed soft demand for discretionary products, partly offset by sustained strength in essentials.
Based on soft first-quarter sales trends, Target guided a low-single-digit-decline in comparable sales for the second quarter. We projected a comparable sales decline of 2.1% for the quarter under discussion.
Besides, management guided greater SG&A rate pressure in the second quarter. As a result, the operating margin rate is likely to decrease on a sequential basis. We anticipate a 120-basis points decline in the operating margin on a sequential basis. However, on a year-over-year basis, we estimate a 280-basis points improvement in the operating margin.
Target Corporation Price, Consensus and EPS Surprise
As a result, the bottom line is expected to showcase year-over-year growth. For the second quarter, the company guided adjusted earnings in the band of $1.30-$1.70 per share, up sharply from 39 cents reported in the year-ago period.
Markedly, management has been undertaking cost-control measures, such as working with vendors and driving continued operational efficiencies. The company’s digital endeavors, store investments and merchandise actions to gain market share are expected to have aided its performance.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Target this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
Target has a Zacks Rank #4 (Sell) and an Earnings ESP of -6.82%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Walmart (WMT - Free Report) currently has an Earnings ESP of +1.07% and a Zacks Rank #2. The company is expected to register a bottom-line decline when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for quarterly earnings per share of $1.68 suggests a decrease of 5.1% from the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Walmart’s top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $159.7 billion, indicating an increase of 4.5% from the figure reported in the year-ago quarter. WMT has a trailing four-quarter earnings surprise of 12%, on average.
Casey's General Stores (CASY - Free Report) currently has an Earnings ESP of +1.03% and carries a Zacks Rank #2. The company is likely to register a bottom-line decrease when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.39 suggests a decline of 17.1% from the year-ago quarter.
Casey's General Stores’ top line is expected to decrease year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.85 billion, which indicates a drop of 13.5% from the figure reported in the prior-year quarter. CASY has a trailing four-quarter earnings surprise of 7.5%, on average.
Costco (COST - Free Report) currently has an Earnings ESP of +1.08% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports fourth-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $4.72 suggests a rise of 12.4% from the year-ago reported number.
Costco’s top line is expected to ascend year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $78.86 billion, which calls for an increase of 9.4% from the prior-year quarter. COST has a trailing four-quarter earnings surprise of 1.8%, on average.
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Target (TGT) Lined Up for Q2 Earnings: What's in Store?
Target Corporation (TGT - Free Report) is likely to report a decline in the top line when it reports second-quarter fiscal 2023 results on Aug 16 before market open. The Zacks Consensus Estimate for revenues is pegged at $25,556 million, indicating a decrease of about 1.9% from the prior-year reported figure.
The bottom line of this general merchandise retailer is anticipated to have increased year over year. Although the Zacks Consensus Estimate for earnings per share for the quarter under review has declined by a couple of cents to $1.48 over the past seven days, it suggests a sharp increase from earnings of 39 cents reported in the year-ago period.
Target has a trailing four-quarter negative earnings surprise of 4.9%, on average. In the last reported quarter, this Minneapolis, MN-based company’s bottom line outperformed the Zacks Consensus Estimate by 17.8%.
Key Things to Note
Consumer spending, a key catalyst for the economy, has shown signs of slowing down. Several factors have come into play, including underlying inflationary pressure, a higher interest rate environment and reductions in pandemic savings. Target might have witnessed soft demand for discretionary products, partly offset by sustained strength in essentials.
Based on soft first-quarter sales trends, Target guided a low-single-digit-decline in comparable sales for the second quarter. We projected a comparable sales decline of 2.1% for the quarter under discussion.
Besides, management guided greater SG&A rate pressure in the second quarter. As a result, the operating margin rate is likely to decrease on a sequential basis. We anticipate a 120-basis points decline in the operating margin on a sequential basis. However, on a year-over-year basis, we estimate a 280-basis points improvement in the operating margin.
Target Corporation Price, Consensus and EPS Surprise
Target Corporation price-consensus-eps-surprise-chart | Target Corporation Quote
As a result, the bottom line is expected to showcase year-over-year growth. For the second quarter, the company guided adjusted earnings in the band of $1.30-$1.70 per share, up sharply from 39 cents reported in the year-ago period.
Markedly, management has been undertaking cost-control measures, such as working with vendors and driving continued operational efficiencies. The company’s digital endeavors, store investments and merchandise actions to gain market share are expected to have aided its performance.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Target this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
Target has a Zacks Rank #4 (Sell) and an Earnings ESP of -6.82%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Walmart (WMT - Free Report) currently has an Earnings ESP of +1.07% and a Zacks Rank #2. The company is expected to register a bottom-line decline when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for quarterly earnings per share of $1.68 suggests a decrease of 5.1% from the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Walmart’s top line is anticipated to rise year over year. The consensus mark for revenues is pegged at $159.7 billion, indicating an increase of 4.5% from the figure reported in the year-ago quarter. WMT has a trailing four-quarter earnings surprise of 12%, on average.
Casey's General Stores (CASY - Free Report) currently has an Earnings ESP of +1.03% and carries a Zacks Rank #2. The company is likely to register a bottom-line decrease when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.39 suggests a decline of 17.1% from the year-ago quarter.
Casey's General Stores’ top line is expected to decrease year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.85 billion, which indicates a drop of 13.5% from the figure reported in the prior-year quarter. CASY has a trailing four-quarter earnings surprise of 7.5%, on average.
Costco (COST - Free Report) currently has an Earnings ESP of +1.08% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports fourth-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $4.72 suggests a rise of 12.4% from the year-ago reported number.
Costco’s top line is expected to ascend year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $78.86 billion, which calls for an increase of 9.4% from the prior-year quarter. COST has a trailing four-quarter earnings surprise of 1.8%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.