How Target Knocked It Out of the Park in Q4

Chris Lange

Target Corp. (NYSE: TGT) released its fiscal fourth-quarter financial results before the markets opened on Tuesday. The retailer posted $1.53 in earnings per share (EPS) and $23.0 billion in revenue, which compares with consensus estimates that were calling for $1.52 in EPS and $22.96 billion in revenue. The same period of last year reportedly had EPS of $1.36 on $22.77 billion in revenue.

Overall, comparable sales grew 5.3% in the fourth quarter. Stores comparable sales grew 2.9%, while comparable digital sales grew 31%, contributing 2.4 percentage points to comparable sales growth.

During the quarter, Target returned $951 million to shareholders through dividends and share repurchases, bringing the total to $3.4 billion for full-year 2018. At the end of the fourth quarter, the company had roughly $1.6 billion of remaining capacity under its current $5 billion share repurchase program.

Looking ahead to the fiscal first quarter, Target expects to see a low- to mid-single-digit increase in comparable sales and EPS in the range of $1.32 to $1.52. Consensus estimates are $1.43 in EPS and $17.38 billion in revenue for the quarter.

Brian Cornell, board chair and chief executive of Target, commented:

We’re very pleased with our fourth quarter performance, which capped off an outstanding year for Target. Thanks to the dedication of Target’s team, we delivered our strongest traffic and comparable sales growth in well over a decade, and our 2018 Adjusted EPS set a new all-time record for the Company. We have been driving an ambitious agenda to transform our Company, evolve with our guests and drive strong growth. On every count we’ve been successful, and as we enter 2019, we will continue to lead the industry by adapting, innovating and delivering more for our guests and shareholders.

Shares of Target closed Monday at $72.67, in a 52-week range of $60.15 to $90.39. The consensus price target is $82.92. Following the announcement, the stock was up about 7% at $77.65 in early trading indications Tuesday.