The Target bullseye logo is seen on the outside of its store at the Lycoming Crossing Shopping Center.
Paul Weaver | Lightrocket | Getty Images
Target will report earnings on Wednesday morning as the big-box retailer gears up for the holiday season, gets ready for a new CEO and tries to snap a sales slump.
Here’s what Wall Street expects for the Minneapolis-based retailer’s fiscal third quarter, according to a survey of analysts by LSEG:
- Earnings per share: $1.72 expected
- Revenue: $25.32 billion expected
Target’s sales have been roughly stagnant for four years as it faces stiffer competition and has grown weaker in some of the areas that set it apart in the past, including its eye-catching merchandise, its well-organized stores, and its friendly and helpful customer service. Some customers also boycotted the retailer after it rolled back key diversity, equity and inclusion programs, a dynamic that Target blamed in part in May for its weaker sales results.
Target expects sales to decline again this year by a low single-digit percentage. It said adjusted earnings per share for the year, excluding gains from litigation settlements, will range from about $7 to $9. Most of that range would come in lower than last year, when adjusted earnings per share were $8.86.
Target announced in August that Michael Fiddelke, the company’s chief operating officer and former chief financial officer, would become its next CEO. He will succeed longtime Chief Executive Brian Cornell in February.
On an earnings call in August, the day of Target’s CEO announcement, Fiddelke laid out his three top priorities: reestablishing Target’s reputation as a retailer with stylish and unique items, providing a more consistent customer experience, and using technology more effectively to operate an efficient business.
He said he wouldn’t wait until stepping into the role to make changes.
Last month, Target announced it would cut 1,800 corporate jobs — its largest layoff in a decade. It’s made moves to sharpen its merchandise and get back its fashion sense, including sending its designers to rodeos and ski lodges for inspiration. And it’s tweaked its online fulfillment strategy at stores to try to free up employees’ time to stock shelves and assist customers.
It also rolled out a policy change that shoppers may notice during the holiday season, which it dubbed the 10-4 program. When store employees are within 10 feet of a customer, Target has asked them to smile and show friendly and welcoming body language, such as waving and making eye contact. When a customer is within 4 feet, Target is asking store employees to initiate a conversation by personally greeting the shopper along with smiling.
Target isn’t the only big-box retailer getting a new CEO. Its rival Walmart announced last week that John Furner, the chief executive of its U.S. business, will succeed longtime CEO Doug McMillon. He will start the role on Feb. 1, the same day Fiddelke takes over at Target.
