
Will Target (TGT) Stock Rebound on Revenue Beat?
NEW YORK (TheStreet) -- Target Corp. (TGT) - Get Report reported earnings that met estimates and revenue that surpassed expectations for the fiscal 2015 third quarter before the market open on Wednesday.
The retailer reported earnings of 86 cents per share for the quarter ended October 31, in line with estimates, while revenue increased 2.1% year-over-year to $17.61 billion, beating estimates of $17.57 billion.
Overall same stores sales rose 1.9% with digital channel sales growing 20% and physical same stores sales increasing 1.4%.
"The third quarter marked the fourth consecutive quarter in which we have grown traffic, and Target's sales growth continues to be led by our signature categories: style, baby, kids and wellness," CEO Brian Cornell said in a statement.
Comparable sales in the signature categories increased more than 2.5 times faster than the company's average.
Additionally, Target increased its full year earnings guidance to $4.65 to $4.75 per share, compared with the previous outlook of $4.60 to $4.75 per share.
Target stock is down 5.05% to $69.26 in mid-morning trading.
Insight from TheStreet's Rating Team
Target is part of Jim Cramer'sAction Alerts PLUS charitable trust portfolio. Here's what Cramer, portfolio manager, and Jack Mohr, research director, have to say about the retailer's latest quarter:
Overall, the company delivered a solid in-line quarter that didn't necessarily blow us away, but did show positive trends. More specifically, it is encouraging to see Target fight off the "guilty by association" tag burdening the stock ever since the poor performances from Macy's(M) and Nordstrom (JWN).
Target has roughly a 20% apparel product mix, so while there had been some speculation that it could be affected by similar apparel trends, the company ultimately slogged on.
That being said, note that Target will inevitably be compared not only to Wal-Mart (WMT) but also to Lowe's (LOW) and Home Depot (HD), as is the nature of the beast when you have a diversified business.
All of these names beat expectations to a higher degree, so while Target certainly did better than the apparel-focused department stores and provided an optimistic outlook, it has become clear that the home-improvement stores have raised the bar.
All in, we believe Target did enough to climb higher in the tough retail environment, especially given the upside over consensus in guidance. In this volatile market, we ultimately believe the company's consistent results will emerge as a driver for share gains...
Jim Cramer and Jack Mohr's "Target's 3Q Results Hit the Bull's-Eye" was originally published on 11/18/15 on Action Alerts PLUS.
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Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.









