The 10-second takeaway
For the quarter ended Oct. 27 (Q3), Target met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share expanded significantly.
Gross margins dropped, operating margins contracted, net margins expanded.
Target recorded revenue of $16.93 billion. The 18 analysts polled by S&P Capital IQ expected to see net sales of $16.96 billion on the same basis. GAAP reported sales were 3.2% higher than the prior-year quarter's $16.40 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.90. The 22 earnings estimates compiled by S&P Capital IQ predicted $0.81 per share. GAAP EPS of $0.96 for Q3 were 17% higher than the prior-year quarter's $0.82 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 31.0%, 30 basis points worse than the prior-year quarter. Operating margin was 6.0%, 40 basis points worse than the prior-year quarter. Net margin was 3.8%, 40 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $22.81 billion. On the bottom line, the average EPS estimate is $1.55.
Next year's average estimate for revenue is $73.31 billion. The average EPS estimate is $4.47.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,406 members out of 2,639 rating the stock outperform, and 233 members rating it underperform. Among 787 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 735 give Target a green thumbs-up, and 52 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Target is outperform, with an average price target of $69.85.
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