In This Article:
Target (NYSE:TGT) delivered stronger-than-expected Q4 earnings, but the retailer is bracing for a rough first quarter, warning of a meaningful profit drop as February sales came in weak. Shares fell 2.80% on Tuesday following the announcement.
The company's comparable sales rose 1.5%, driven by an 8.7% jump in digital sales, while in-store sales dipped 0.5%. Net sales were down 3.1% year-over-year at $30.9 billion, partly due to a shorter fiscal year. Operating income slid 21.3% to $1.5 billion, but earnings per share of $2.41 beat expectations of $2.26.
Walmart (NYSE:WMT) and Home Depot (NYSE:HD) have also raised concerns about weaker consumer spending, while sentiment surveys from the Conference Board and University of Michigan show declining confidence and inflation worries. Adding to the gloom, the Atlanta Fed slashed its Q1 2025 GDP forecast to -2.8%.
Target CFO Jim Lee said cold weather and cautious consumers weighed on sales, especially in discretionary categories, making the outlook for Q1 even tougher.
This article first appeared on GuruFocus.