The Target Bullseye logo is seen outside its store at the Lycoming Crossing mall.
Paul Tisserand | Light flare | Getty Images
Target will report earnings Wednesday morning as the big-box retailer gears up for the holiday season, prepares to hire a new CEO and tries to stem a decline in sales.
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
- Income: $25.32 billion expected
Target’s sales have been stagnant for roughly four years as the company faces tougher competition and has weakened in some of the areas that set it apart in the past, including its eye-catching products, well-curated stores and friendly, helpful customer service. Some customers also boycotted the retailer after it rolled back key diversity, equity and inclusion programs, a dynamic 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. Adjusted earnings per share for the year, excluding gains from litigation settlements, will be around $7 to $9. Most of that range would be 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 CEO Brian Cornell in February.
During an earnings conference call in August, the day of Target’s CEO announcement, Fiddelke laid out his top three priorities: restoring Target’s reputation as a retailer with stylish and unique items, providing a more consistent customer experience, and using technology more effectively to run an efficient business.
He said he wouldn’t wait until he takes office to make changes.
Last month, Target announced it would cut 1,800 corporate jobs, in what would be the largest layoffs in a decade. She took steps to refine her products and rediscover her fashion sense, including sending her designers to rodeos and ski lodges for inspiration. And it has tweaked its strategy for fulfilling online orders in stores to try to free up employees’ time to stock shelves and help customers.
It also implemented 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 asked them to smile and display friendly, welcoming body language, such as waving and making eye contact. When a customer is within 4 feet, Target asks store employees to initiate a conversation by personally greeting the customer and smiling.
Target isn’t the only big box retailer to have a new CEO. Rival Walmart announced last week that John Furner, the chief executive of its U.S. operations, would succeed longtime CEO Doug McMillon. He will begin his role on February 1, the same day Fiddelke takes over at Target.