Target Blows by Estimates as Company Has Banner Q4 Earnings Report

By Thomas Price Tuesday, March 2, 2021

Retail company Target impressed many investors following a strong Q4 earnings report where the company beat out analyst expectations across the board. Business boomed for the company in recent months as consumer spending rose due to stimulus checks, and Target continued to position itself as a great resource to safely purchase food and other assorted retail products. While the recent Q4 report has excited many investors, many others remain uneasy as the business did not provide future guidance for 2021, keeping company stock flat in pre-market trading.

A Target storefront.

Target’s Q4 Earnings vs. Expectations

In Target’s Q4 earnings report, the company generated $28.34 billion in total revenue. The revenue numbers mark a major increase of 21.1% from the same quarter last year, as the company has benefited heavily from strong digital sales growth and increased traffic in stores. The company also beat out analyst expectations which projected less business in the quarter at $27.48 billion.

Target outperformed projections for total earnings as well, with the company reporting adjusted earnings of $2.67 per share as opposed to the expected $2.54 per share from Wall Street. The business also grew its earnings per share by nearly a full $1 in comparison to the same quarter last year, where the company reeled in earnings of $1.69 per share.

Target’s strong Q4 report can be most attributed to the growth of its online business and the holiday enthusiasm mixed with the most recent round of stimulus checks. In fact, the company saw an incredible 118% growth in digital sales during the quarter, adding to the 6.9% growth in comparable store sales. The addition of a stimulus check to Americans during the holiday season helped boost these numbers as the business remained a major source of retail purchasing in Q4.

Target Future Outlooks and Stock Market Reaction

One of the major drawbacks of the banner Q4 report from the business was the lack of 2021 guidance on Q1 or the fiscal year as a whole. Target is already set for a challenging year, with many investors fearing that the economic recovery as the world reopens will see consumers spending their money on other businesses. This uneasiness was reflected in the company’s stock during pre-market trading, where Target has fluctuated between minimal gains and slight losses all morning.

In a statement released with the Q4 report, Chairman and CEO of the business, Brian Cornell, said, “Following years of investment to build a durable, scalable and sustainable business model, we saw record growth in 2020, as our guests turned to Target to safely provide for their families throughout the pandemic. With the strength of our unique, multi-category assortment and the flexibility we offer through our reliable and convenient fulfillment options, we gained nearly $9 billion in market share in 2020, and grew our revenue by $15 billion, which is more than the 11 prior years combined.”

About the Author

Headshot of Thomas Price

Tom Price is a writer focusing on entertainment and sports features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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