Target lifts outlook as thrifty shoppers ditch Macy’s
Make us a preferred source
Make us a preferred source on Google
The news: Target ended a more-than-a-year-long decline in quarterly sales with a 2% increase in comparable sales in the June quarter, surpassing analyst expectations.
Price cuts on thousands of items drove customer demand as the retailer, one of the largest in the US and often considered more upscale than its larger competitor Walmart, focused on product mix and competitive pricing, particularly among discretionary items like apparel and beauty.
The numbers: Target raised its FY24 profit forecast to USD9.00-USD9.70 per share, up from USD8.60-USD9.60 per share, sending its shares as much as 16.9% higher.
The context: Echoing comments by Walmart last week, executives said consumers continued to be resilient and value-seeking.
AN increasingly discriminating consumer was also reflected in Macy’s results, which were accompanied by a lowered earnings forecast for the year.
The largest US department store chain said it now expects a 2.2% decline due to a “challenging” consumer environment, sending its shares as much as 14% lower to USD15.25 each.
The retailer said comparable sales across brands including Bloomingdale’s fell 4% in Q2 amid increased discounting by competitors and a more cautious consumer.
Elsewhere, TK Maxx parent, TJX reported better-than-expected quarterly results and raised its annual profit forecast, driven by sales of affordable apparel and accessories to budget-conscious customers.
TJX also benefited from easing freight costs, reporting a quarterly profit of 96 cents per share on net sales of USD13.47 billion, surpassing expectations. TJX expects annual earnings per share between USD4.09 and USD4.13, up from USD4.03 to USD4.09 earlier.
The off-price retailer said it agreed to acquire a 35% stake in Dubai-based Brands For Less for USD360 million, expanding its reach into the Middle East, India, Malaysia and Singapore.
The sources: Target statement , Macy’s statement , TJX statement , Reuters , Bloomberg
