Target shares are up 6.2% in the pre-market despite cutting its full-year sales and profit forecast. It’s Q2 revenue fell short of estimates but earnings beat.
The company now sees full-year earnings of $7-8 versus $7.75-$8.75 previously.
Shares have recently slumped so the market likely already baked in a gloomy quarter. Looking ahead, the company said that trends softened in the second half of May and into June but that there was a ‘meaningful recovery’ in both traffic and comps in July.
Home Depot yesterday also highlighted strengthening sales in the latter half of June.
“As we look at the consumer landscape today, we recognize the consumer is still challenged by the levels of inflation that they’re seeing in food and beverage and household essentials,” said CEO Brian Cornell. “So that’s absorbing a much bigger portion of their budget.”
US July retail sales numbers reported yesterday beat estimates but spending has been moving from goods to services all year on the exit from covid. Target said comp sales fell 5.4% y/y.
The company also highlighted rising problems with theft and a backlash to its pride collection, which Cornell said had a ‘material’ impact on sales.
Target shares