MINNEAPOLIS — Target CEO Brian Cornell says stronger-than-expected back-to-school sales lifted the retailer in the third quarter, prompting the company to raise its fourth-quarter sales and full-year earnings forecast.
For the third quarter ended Oct. 29, Target reported a comparable sales decline of 0.2%, the retailer's second-straight quarterly drop in same-store sales. Target earned $1.04 per share, adjusted, on sales of $16.44 billion. Analysts had expected the company to report earnings of 83 cents a share on $16.3 billion in revenue, according to Thomson Reuters. In the prior-year period, Target earned 86 cents a share on sales of $17.61 billion.
“We are very pleased with our third quarter financial results, which reflect meaningful improvement in our traffic and sales trends and much stronger-than-expected profitability,” said Brian Cornell, chairman and CEO of Target. “Favorable gross margin mix and efficient execution by our team drove third quarter EPS performance well beyond our guidance. We also continued to gain market share in key Signature Categories and saw unexpectedly strong sales in the Back-to-School and Back-to-College season. As we move into the biggest quarter of the year, we are pleased with our inventory position and confident that our team will deliver a great guest experience as they bring our merchandising and marketing plans to life throughout the holiday season.”
Target raised its expectations for fourth quarter comparable sales and now expects growth in the range of flat to 1%, compared with prior guidance of -2% to flat. In the fourth quarter, Target expects both GAAP EPS from continuing operations and Adjusted EPS of $1.55 to $1.75. It predicts full-year adjusted earnings per share will come in between $5.10 and $5.30, compared with its prior forecast of $4.80 to $5.20.