On Wednesday, Target shares
(NYSE: TGT) plunged after reporting dismal earnings result on Tuesday for the
fiscal fourth quarter, this was weighed down by another lower-than-expected
outlook for first quarter and full year 2017.
TGT plummeted 12.17% or $8.14, to
$58.77 per share at the market’s close on Tuesday. Prior to the earnings
report, Target’s stock was moving at an upward trend at $66.91 per share.
Ahead of the earnings report on
Tuesday, Target Corp. already lowered its outlook for the fourth quarter
results, saying its stores saw weak sales during the holiday season in 2016;
however, Target posted even lower results which altogether disappointed the
market.
For the fourth quarter earnings,
the retail company posted revenues at $20.69 billion, which was short from the
$20.7 billion forecast and 4.3% down year-over-year, which was then $21.63
billion. According to Target, the weak results came in after it decided to remove
pharmacy and clinic sales from the results, as well as a 1.5% drop in
comparable store sales.
Meanwhile, the fourth quarter net
earnings disappointed investors most as it fell 42.7% to $817 million, with
earnings per share of $1.45 and lower by 37.6% from a year ago. The EPS was 5
cents lower from forecasts. Target attributes low sales to stronger sales from
ecommerce giants like Amazon
“Our fourth quarter results
reflect the impact of rapidly-changing consumer behavior, which drove very
strong digital growth but unexpected softness in our stores. We will accelerate
our investments in a smart network of physical and digital assets as well as
our exclusive and differentiated assortment, including the launch of more than
12 new brands, representing more than $10 billion of our sales, over the next
two years,” Target CEO Brian Cornell stated after the dismal report.
Target gave a more modest outlook for the first quarter for
2017, given the challenges it experienced from the past year. According to
Target, they are expecting a low to mid range of single digit decline for
comparable store sales, with earnings of $0.80 to $1.00 per share.
The retail company promised new investments and brands to
improve sales for 2017, while also stating that they will lower prices in order
to keep up its competitors like Walmart.
Included on Target’s new strategies to recover better sales
for 2017, the retail company said it will refurbish around 600 stores and open
100 smaller branches situated in cities and college campuses, target to be
opened by 2019.
“Our plan right now is to make sure we don’t take our eyes
off of the importance of quality, design and innovation in our stores and with
our brands, but we also need to make sure we’re continuing to deliver the value
the guest is looking for,” Cornell assured investors. Despite new strategies to
regain customer appeal, Target promised that loyal customers will still see the
trademark cheap chic style that the company is well-known for.
So there we have it! Be enlightened with the latest news on online trading, commodities, stocks, technology, and economy. Subscribe now! Trade12 Reviews waits for you. Visit our broker website here and start trading!
Target Stock Plunges after Earnings and Outlook Miss
Reviewed by Trade12 Reviews
on
5:59 AM
Rating:
Reviewed by Trade12 Reviews
on
5:59 AM
Rating:
No comments: