Updated from April 18 to include additional details.
According to a report from Reuters, Target is poised to increased its minimum wage for all workers to $10 an hour in May, citing two sources with direct knowledge of the move. Target previously increased its minimum wage to $9 an hour last year.
A Target spokesperson declined to comment on the Reuters report.
"We pay market competitive rates and regularly benchmark the marketplace to ensure that our compensation and benefits packages will help us to both recruit and retain great talent," the spokesperson said in an email. "However, we typically don't disclose the details of our compensation programs."
TheStreet reached out to several Target employees on Instagram to ask them about the reported increases but it doesn't appear if they've been notified about any changes.
Target's reported wage hike comes in the wake of several competitors lifting pay for employees this year.
In February, Walmart (WMT) - Get Report raised its minimum wage for store workers hired before Jan. 1 to at least $10 an hour from $9 an hour. The average hourly wage for full-time Walmart associates (hourly only, no salaried associates included) is $13.38 an hour, and $10.58 an hour for part-time employees.
To remain competitive, Target likely had no other choice but to lift its own hourly wages. Judging by the experience of rival Walmart, the higher hourly pay could take a chunk out of Target's bottom line and a stock price that has gained about 3% in the past year vs. a 0.3% drop for the S&P 500.
Walmart has said that higher wages for its associates will dent profits by about $1.5 billion in the current fiscal year, following a $1.2 billion hit a year ago. As a result of its muted bottom line, Walmart shares have plunged roughly 10% in the last year.
Target expects its earnings this year, excluding one-time items, to be in a range of $5.20 to $5.40 a share compared to $4.69 a share a year earlier.
"I just think the stock doesn't represent the full value of the transformation Target CEO Brian Cornell is creating," said TheStreet's founder Jim Cramer.