Target Earnings: Here’s Why the Stock is Down Now

Target Corp. (NYSE:TGT) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 1.85%.

Target Corp. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 10.38% to $0.95 in the quarter versus EPS of $1.06 in the year-earlier quarter.

Revenue: Rose 2.01% to $17.12 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Target Corp. reported adjusted EPS income of $0.95 per share. By that measure, the company missed the mean analyst estimate of $0.96. It missed the average revenue estimate of $17.26 billion.

Quoting Management: “Target’s second quarter financial results benefited from disciplined execution of our strategy and strong expense control, offsetting softer-than-expected sales,” said Gregg Steinhafel, chairman, president, and chief executive officer of Target Corporation. “For the balance of this year, our U.S. outlook envisions continued cautious spending by consumers in the face of ongoing household budget pressures. In Canada, where we are only five months into our market launch, we continue to learn, adjust and refine operations in our existing stores as we prepare to open another 56 stores by year-end.”

Key Stats (on next page)…

Revenue increased 2.46% from $16.71 billion in the previous quarter. EPS increased 15.85% from $0.82 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.89 to a profit $0.88. For the current year, the average estimate has moved down from a profit of $4.41 to a profit of $4.33 over the last ninety days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)