Shares for Target Corporation (NYSE:TGT) are up more than 1% in early trading hours today despite a pre-market quarterly earnings report that landed below Wall Street expectations.
The company’s CEO Brian Cornell has been undertaking steps to help regain interest of lost customers over the past one year. Aggressive moves involve revamping some core brand categories including baby products and apparel categories. Owing to these changes, the company said it posted positive same stores sales growth for the sixth consecutive quarter.
The company has also been investing to tap the growing health and fitness trends including a design partnership with SoulCycle and adding some fast casual eating options at its front-of-store cafes.
For the fourth quarter, the company said it earned $1.52 per share compared to $1.54 consensus Wall Street estimates and the prior year figure of $1.5. Revenues for the quarter came in at $21.6 billion, again missing the Street’s estimate of $21.75 billion. In the same quarter last year, the company posted $21.75 billion in revenues.
Target also said its same store sales grew 1.9% buoyed mainly by improved traffic growth of 1.3% compared to the same quarter last year. In the US alone, Target’s same store sales grew by 4%.
During the fourth quarter, the company paid $345 million in quarterly dividends and undertook $1.26 billion in share repurchases.
Brian Cornell in a press release said, “With traffic growing for five consecutive quarters and our signature categories of Style, Baby, Kids, and Wellness leading our growth, Target’s results demonstrate that we are focused on the right strategic priorities.”
For the fourth quarter, sales for Target’s core categories (that contribute the most to revenues) was a prominent factor propelling stronger earnings results. The company said sales for styling goods, baby products, and children’s products, mainly toys, grew three times faster than the company’s historic average. Some other changes at the stores like using mannequins for improved visuals as opposed to using plain racks also helped propel sales, said the company’s chief technology officer Cathy Smith to media personnel.
For the ongoing quarter, the company said it expects to earn between $1.15 and $1.25 in adjusted earnings per share (EPS). That compares with the Street’s consensus estimate of $1.19.