Target delivered mixed earnings results for the third quarter on Tuesday, generating more revenue than expected but falling short on earnings as the company spent more on its same-day delivery service and raised wages.
Despite the earnings miss, Target maintained its forecast for the full year. It also said it's "better positioned for this holiday season than ever before" against a backdrop of strong consumer confidence in the U.S.
CEO Brian Cornell said there's absolutely "no sign" consumer spending is cooling off as retailers head into the holiday season.
"There is no indicator as we sit here today that the consumer environment is slowing as we enter the holiday season," Cornell told reporters on a conference call. He raved about the U.S. economy earlier this year, saying it was one of the best he'd ever seen in his career.
Investors still drove Target's shares down by more than 9 percent in morning trading, worried that inventories were building too much ahead of the holidays and that profit margins were weak.
Here's what Target reported for its fiscal third quarter compared with what Wall Street was expecting, based on a poll of analysts by Refinitiv:
- Earnings per share: $1.09, adjusted, vs. $1.12 expected
- Revenue: $17.82 billion vs. $17.80 billion expected
- Same-store sales: up 5.1 percent vs. growth of 5.2 percent expected
Net income grew to $622 million, or $1.17 per share, compared with $478 million, or 87 cents per share, a year ago. Excluding one-time items, Target earned $1.09 per share, short of expectations for $1.12 per share, based on a survey by Refinitiv.
Total revenue climbed 5.6 percent from a year ago to $17.82 billion, slightly beating analysts' estimates.