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Summary
- Target’s net earnings surged to US$2.10 billion in the fiscal first quarter.
- The Minneapolis-based retailer’s stock is up 23.5 percent year to date.
- Target expects Q2 comparable sales to grow in mid-to-high single digits.
The stock of Target Corporation (NYSE:TGT) rose over 4 percent on Wednesday morning, May 19, after the retailer posted a 639 percent year-over-year growth in its fiscal first-quarter earnings.
The Minneapolis-based general merchandise retailer reported US$2.10 billion in net earnings during the first quarter ended May 1, compared with US$284 million in the first quarter of the previous year.
GAAP EPS rose from 56 cents in the year-ago period to US$4.17 in the current quarter, and adjusted EPS soared 525 percent to US$3.69 from 59 cents in Q1 of the previous fiscal year.
Read More: Macy’s Raises FY’21 Forecast; Stock Up 68% YTD
Strong Q1’21 Sales
Target’s comparable sales in the three-month period rose 22.9 percent as comparable-store sales grew 18 percent, while comparable digital sales soared 50 percent.
Apparel sales recorded a strong comparable growth of more than 60 percent as more people are venturing out and spending. The company witnessed lower growth in the food, beverages, and essentials segment.
Sales of Target's own brands grew at a record pace of approximately 36 percent during the first quarter.
Source: Pixabay
The company’s same-day services such as order pickup, Drive Up, and Shipt services, jumped over 90 percent. Drive Up service recorded 123 percent growth during the period.
Total revenue during the quarter totaled US$24.20 billion, up 23.4 percent from US$19.62 billion in the year-ago quarter. Total sales grew 23.3 percent, while other revenues rose 30.4 percent. The company noted that it earned over US$1 billion in market share in Q1.
Also Read: Home Depot Revenues Soar 84%, Sales Up 32.7% In Q1
Outlook
While reporting its previous quarter result, Target refrained from putting out a forecast, citing an uncertain outlook on shopping trends and pandemic impact.
However, Target now anticipates its comparable sales to grow in mid-to-high single digit in the second quarter and positive single-digit during the last two quarters of the financial year.
Stock Performance
Target has a market capitalization of over US$107 billion. The stock rose 23.5 percent year to date, while it soared 75 percent in the one-year period. It has a 52-week range of US$114.23 to US$218.50.
As of 10:50 am ET, Target’s stock was trading at 215.43, up 4.36 percent from the previous close.
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