Target Corp. (TGT) - Get Target Corporation Report posted stronger-than-expected third quarter earnings Wednesday, and lifted its full-year outlook for same-store sales, but noted margin pressures linked to supply chain disruptions and labor costs.
Target said adjusted earnings for the three months ending in October were pegged at $3.03 per share, an 8.6% increase from the same period last year and well ahead of the Street consensus forecast of $2.83 per share.
Group revenues, Target said, rose 13.3% to $25.65 billion, again besting analysts' estimates of a $24.78 billion tally. Gross profit margins for the quarter, however, narrowed by 2.6 percentage points to 28%.
Target said same-store sales rose 12.7%, well ahead of the Refinitiv forecast of 8.4%. Comparable digital sales, as store traffic rose nearly 13% as customers returned to traditional shopping in the wake of pandemic-era restrictions. Digital comparable sales were up 29%, Target said.
Looking into the final months of the year, Target said it expects same-store sales to rise by a 'high single digit to low double digit' percentage, a modest increase from its prior forecast.
"The consistently strong growth we're seeing in our business, quarter after quarter, is a testament to the passion and commitment our team brings to serving our guests, and the trust we've built with them as a result," said CEO Brian Cornell. "Following comp growth of nearly 21% a year ago, our third quarter comp increase of 12.7% was driven entirely by traffic, and reflects continued strength in our store sales, same-day digital fulfillment services and double-digit growth in all five of our core merchandising categories."
"With a strong inventory position heading into the peak of the holiday season, our team and our business are ready to serve our guests and poised to deliver continued, strong growth, through the holiday season and beyond," he added.
Target shares were marked 4.3% lower in early Wednesday trading following the earnings release to change hands at $255.00 each.
Target's larger rival, Walmart (WMT) - Get Walmart Inc. Report, posted stronger-than-expected third quarter earnings Tuesday, while boosting its full-year profit forecast, but noted that overall profit margins that were pressured by rising supply chain disruption and labor costs.
The world's biggest retailer said adjusted earnings for the three months ended in October rose 8.2% from last year to $1.45 per share, as group revenues rose 4.3% to $140.5 billion.