Target Corp Earnings Cheat Sheet: Revenue Increase Helps Margin, Net Income Climbs

S&P 500 (NYSE:SPY) component Target Corporation (NYSE:TGT) reported net income above Wall Street’s expectations for the third quarter. Target operates general-merchandise and food discount stores in the United States.

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Target Earnings Cheat Sheet for the Third Quarter

Results: Net income for the discount store rose to $555 million (82 cents per share) vs. $535 million (74 cents per share) in the same quarter a year earlier. This marks a rise of 3.7% from the year earlier quarter.

Revenue: Rose 5.1% to $16.4 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: TGT beat the mean analyst estimate of 74 cents per share. Analysts were expecting revenue of $16.24 billion.

Quoting Management: “We’re very pleased with our third quarter financial results, which reflect strong performance in our U.S. Retail and U.S. Credit Card segments,” said Gregg Steinhafel, chairman, president, and chief executive officer of Target Corporation. “We’re confident that we have the right strategy and team in place to drive continued strong performance this holiday season and well into the future, allowing us to continue rewarding our shareholders while investing millions of dollars each week to support the many local communities where our guests and team members live, work and shop.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 3.7% and in the first quarter, the figure rose 2.7%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 6 cents in the second quarter, by 5 cents in the first quarter, and by 5 cents in the fourth quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 4.6% to $16.24 billion in the second quarter. The figure rose 2.2% in the first quarter from the year earlier and climbed 2.4% in the fourth quarter of the last fiscal year from the year-ago quarter.

Gross margins grew 0.9 percentage point to 31.9%. The growth seemed to be driven by increased revenue, as the figure rose 5.1% from the year earlier quarter while costs rose 3.8%.

Looking Forward: Expectations for the fourth quarter have not changed from $1.47. The average estimate for the fiscal year is $4.22 per share, a rise from $4.14 ninety days ago.

Competitors to Watch: Wal-Mart Stores, Inc. (NYSE:WMT), Costco Wholesale Corp. (NASDAQ:COST), Dollar Tree, Inc. (NASDAQ:DLTR), Dollar General Corp. (NYSE:DG), Gordmans Stores, Inc. (NASDAQ:GMAN), Wal-mart de Mexico S A B de C V (WMMVY), Family Dollar Stores, Inc. (NYSE:FDO), 99 Cents Only Stores (NYSE:NDN), Fred’s, Inc. (NASDAQ:FRED), and BJ’s Wholesale Club, Inc. (NYSE:BJ).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)