What To Expect From Target's (TGT) Q4 Earnings Tuesday

Target (NYSE:TGT) shares have climbed over 10% this year as part of the larger market comeback to start 2019. So let’s see if this positivity might continue for the retailer by taking a look at what to expect from Target’s fourth quarter financial results that are due out on Tuesday, March 5.

Quick Overview

Target rival Walmart (NYSE:WMT) posted impressive quarterly financial results in mid February. The firm posted 40% full-year e-commerce growth and 3.6% fiscal 2019 U.S. comps expansion, to help prove that Amazon-based (NASDAQ:AMZN) fears were likely overblown. With that said, the e-commerce powerhouse did force Target, Costco (NASDAQ:COST) , Kroger (NYSE:KR) , and other retailers to improve their digital businesses, roll out online pickup and delivery, and much more.

The Minneapolis-based retailer has revamped its supply chain and introduced same-day delivery at many locations. Target has also improved its pricing and digital strategies, redesign many stores, as well as opened smaller locations in college towns and urban areas.

Investors should note that Target already released its November/December sales results in January. TGT’s holiday period comparable sales jumped 5.7% to top of the year-ago period’s 3.4% comps expansion. More specifically, TGT’s Drive Up service and Store Pickups sales surged 60% from the prior-year period, while digital comps soared 29%. Target also expects its overall digital sales will climb 25% for the fifth consecutive year.

Q4 Outlook

Target reaffirmed its Q4 comparable sales estimate of around 5%, which would nearly fall in line with Q3’s 5.1% comps growth and easily surpass the prior-year period’s 1.8% same-store sales expansion. “Given our fourth quarter outlook, we are on track to deliver Target's strongest full-year comparable sales growth since 2005, market-share gains across all of our core merchandising categories, and double-digit growth in Adjusted EPS,” CEO Brian Cornell said in a statement.

Meanwhile, our current Zacks Consensus Estimate calls for Target’s overall Q4 revenue to climb 1.67% to reach $23.15 billion. TGT’s fourth-quarter comps are projected to jump 5.03%, based on our NFM estimate to match the company’s own projection.

At the bottom end of the income statement, Target’s adjusted Q4 earnings are projected to surge 11.7% to hit $1.53 per share. On top of that, Target’s full-year 2018 EPS figure is expected to pop 14.4%. Target has also experienced some positive earnings estimate revision activity for Q4 and fiscal 2018 over the last 60 days.

Bottom Line

Target stock rested at $72.66 a share through early afternoon trading Friday. This represented a roughly 20% downturn from its 52-week high of $90.39 a share and sets up what could be a solid buying opportunity for those high on Target. Let’s also not forget that Target is a dividend payer that has consistently raised its quarterly payout over the years.

Target is scheduled to release its fourth quarter and full-year 2018 financial results before the market opens on Tuesday, March 5. Make sure to head back to Zacks for a full breakdown of Target’s actual Q4 results then.

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