Target Plunges 12% After Missing Lowest EPS Estimate, Slashing Outlook

zerohedge.com / by Tyler Durden / Feb 28, 2017

When we discussed yesterday Reuters’ report that Wal-Mart is now actively “price testing” its products, and squeezing vendors in a scramble to preserve market share while keeping margins relatively flat, we cautioned that this is the latest indication of what appears to be a pervasive “deflationary shock” among the retail industry which is caught in a vicious fight for market share. This morning’s results from Target validated this observation: moments ago the retail giant reported Q4 EPS of $1.45, missing both consensus ($1.51) and the lowest Wall Street estimate ($1.47), even as Q4 revenue came largely in line with expectations of $20.7 billion, suggesting that holiday spending was indeed far worse

The internals were just as messy, with Target reporting comp sales of -1.5%, missing the -1.3% estimate, on gross margin of 26.9%

But the most troubling part of the release was the company’s disappointing guidance: Target now sees 1Q adj. EPS of 80c to $1.00, far below the consensus estimate $1.33, and also over 20% below the lowest firecast (range $1.26-$1.41). The bleeding is expected to continue on the back of a “Low-to-Mid Single Digit Decline” in comp store sales in

Read more ... source: The Bitcoin Channel

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