Target Forecasts Tepid 2020 Profit As Online Growth Slows
Target Corp has forecast full-year earnings largely below analysts' estimates and reported quarterly revenue for the holiday season below already lowered expectations, as the retailer's online sales growth lost momentum.
Target's sales figures and forecast help paint a broader picture of the pressure brick-and-mortar retailers are facing in building their e-commerce operations to compete with Amazon.com Inc.
Walmart Inc posted lower-than-expected quarterly results last month and forecast online sales growth to slow this year, while Amazon logged record sales for the holiday season.
Target's comparable digital sales rose 20% in the fourth quarter, compared with 31% growth reported in the third quarter as well as in the year-earlier period.
The company said it expects adjusted earnings of $6.70 to $7 per share for fiscal 2020, the mid-point of which was below analysts' estimates of $6.87 per share, according to IBES data from Refinitiv.
Total revenue rose 1.8% to $23.40 billion in the quarter ended 1 February, missing expectations of $23.50 billion. Analysts had estimated revenue of $23.90 billion at the start of the year.
The company's comparable sales, which include online and store sales, rose 1.5%, matching analysts' lowered estimates.
Net earnings rose 4.4% to $834 million. Excluding certain items, Target earned $1.69 per share, beating estimates of $1.66 per share.