Target (NYSE: TGT) has long been a standout performer in the retail sector. Dividend investors highly value it, and it is renowned for its reliable payouts, prudent capital management, and top-tier competitive position within the retail landscape. Under the leadership of CEO Brian Cornell since 2014, Target has focused on enhancing its in-store shopping experience and developing its omnichannel fulfillment capabilities through the “stores as hubs” model. Over the past five years, Target has reduced its share count by 10.2%, demonstrating a commitment to returning value to shareholders.

The fair value of Target’s stock is determined by the present value of its future earnings stream. For the current quarter, Target is expected to post earnings of $2.18 per share, representing a 21.1% year-over-year increase. Investors prioritizing current income may find Target appealing, thanks to its substantially higher yield and an exceptionally long streak of dividend increases.

Target is a ‘really good company,’ says former Walmart U.S. CEO Bill Simon in an interview on CNBC’s ‘Fast Money’ last month. He also said Target is undervalued.

Target (NYSE: TGT)—The first quarter operating income margin rate of 5.3 percent reflects a 140-basis-point improvement in gross margin rate compared to the prior year.

In the first quarter, comparable sales declined by 3.7 percent, which aligns with expectations.
Digital comparable sales grew 1.4 percent. Same-day services grew nearly 9 percent, led by more than 13 percent growth in Drive Up.

Sales declines, primarily in discretionary categories, were partially offset by continued growth in Beauty.

Discretionary sales trends continued to improve compared to prior quarters, led by an improvement of nearly 4 percentage points in apparel compared to Q4 of 2023.

The Company successfully relaunched its free-to-join Target Circle loyalty program in April and welcomed more than 1 million new members to the platform in the first quarter.

At the end of Q1, inventory was 7 percent lower than last year, even as the Company saw higher in-stock levels than a year ago. Source: Target

Guidance

For the second quarter, the Company expects a 0 to 2 percent increase in its comparable sales and GAAP and Adjusted EPS of $1.95 to $2.35.

For the full year, the Company expects a 0 to 2 percent increase in its comparable sales and GAAP and Adjusted EPS of $8.60 to $9.60. Source: Target

Q2 2024 Target Corporation Earnings Conference Call
8:00 – 9:00 AM EDT
Wednesday, August 21, 2024

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