Clifton, New Jersey – Target, the retail giant, is set to unveil its fiscal fourth-quarter earnings report on Tuesday. Analysts are eagerly awaiting to see if Target has managed to increase sales of discretionary merchandise at full price, a key source of revenue for the company. The consensus estimates from the LSEG indicate that Target’s earnings per share are expected to be $2.26 with revenue reaching $30.8 billion.
However, Target is anticipated to report a decrease in earnings despite upping its fourth-quarter sales forecast in January. Despite experiencing steady foot traffic during the holiday shopping season, Target’s decision to maintain its profit outlook suggests that the company may have heavily relied on promotions and discounts to drive sales. This strategy is likely to have put pressure on the company’s profit margins.
The retailer has faced challenges in winning over consumers with discretionary items amid factors such as inflation, high interest rates, and fierce competition from online retailers like Walmart. While Walmart has shown strength in the discretionary merchandise category and successfully attracted higher-income shoppers, Target has struggled to keep up.
In an effort to boost sales, Target has introduced new partnerships with brands like Champion and Warby Parker. These collaborations are aimed at offering customers fresh and exclusive merchandise, attracting new clientele, and strengthening Target’s competitive position in the market. Despite being announced at the start of the year, these partnerships are not expected to officially launch until the second half of 2025.