The company is simply beating the outlook it kitchen-sinked earlier in the year. Here's what yours truly wrote while sitting at Target's February investor day:
Target said it sees full-year earnings of $3.80 to $4.20 a share, markedly below analysts' forecasts of $5.34. Target Chief Financial Officer Cathy Smith told investors that February sales were "challenging and choppy."
"Efforts have not been enough to win in this challenging marketplace," Brian Cornell, chairman and CEO of Target, conceded to investors at a meeting on Tuesday. Cornell added the marketplace is placing "stress" on Target's financial model.
Is it great that Target managed to hammer out a 1.3% same-store sales increase in the second quarter? For the most part, yes, as it shows the company's renewed commitment to discounting is slowly winning back shoppers. But the efforts are coming at the expense of profits. Further, Target's results show well compared to the second quarter disasters that were Macy's (M) - Get Report , J.C. Penney (JCP) - Get Report , Fossil (FOSL) - Get Report and countless others in bricks-and-mortar retail land.
All in all, Target will have its day in the sun on Wednesday. But by no means should it be coined as being back in lockstep with better-performing rivals such as Walmart (WMT) - Get Report and Amazon (AMZN) - Get Report . For that to happen, Target will have to do much more than beat lowered profit expectations in the third quarter -- it will have to own the holiday shopping season and tell Wall Street things could get brighter in 2018.
More of What's Trending on TheStreet:
- 50 Reasons Dying Sears Had No Choice But to Strike a Deal With the Ruthless Amazon
- Facebook, Google and Others Face Tough Challenge Policing Extremist Content
- 3 Highest Grossing James Bond Movies Now That We Know Daniel Craig Is Returning
- Trump Fires Off, Says Amazon Doing 'Great Damage' to Retailers