Target (NYSE:TGT) reported a mixed set of Q1 results and a weaker-than-expected outlook for the second quarter and full year. Shares whipsawed between positive and negative territory as investors digested the earnings report. The company posted a profit per share of $2.05 on revenue of $25.32 billion, while comparable sales were flat in Q1. Importantly, inventory fell 16% year-over-year, fueled by a 25% reduction in discretionary merchandise categories.
For this quarter, Target sees EPS at $1.50 (up or down 20 cents), missing the $1.93 consensus. For FY24, the profit is seen at $8.25 per share (up or down 50 cents), again missing the $8.44 expectations. The comparable sales outlook is also maintained as Target continues to expect “a wide range from a low-single digit decline to a low-single digit increase.” Chief Growth Officer Christina Hennington said on a call with reporters that “the consumer is under pressure” due to inflation, running out of savings, and economic uncertainty.
Overall, Target’s Q1 results and outlook for the rest of the year were weaker than expected, causing the stock to dip 0.6%. Investors will be closely watching the company’s performance in the coming quarters to see if it can turn things around.