Target Corporation (NYSE: TGT) reported its fourth quarter and full year financial results. The retailer missed estimates in earnings, sending shares 4 percent lower after the opening bell on Tuesday.
For the fourth quarter, Target reported revenue of $22.8 billion, increasing 10 percent year over year and beating analysts’ estimates of $22.5 billion. The company reported an adjusted EPS of $1.37, falling in range of its estimates but falling narrowly short of analysts’ estimates of $1.38.
Target same store comparable sales increased 4 percent alone in January, driven by strong holiday sales, leading to a 3.6 percent increase year over year for the fourth quarter. Same store sales grew due to a 3.2 percent increased traffic growth on top of digital channel sales increasing 29 percent.
"Our fourth quarter results demonstrate the power of the significant investments we've made in our team and our business throughout 2017,” said Brian Cornell, chairman and chief executive officer of Target Corporation, “Our team's outstanding execution of Target's strategic initiatives during the year delivered strong fourth quarter traffic growth in our stores and digital channels, which drove healthy comparable sales in every one of our five core merchandise categories.”
Target forecasts a low-single digit increase in comparable sales for both the first quarter and full year 2018, signaling a stronger first quarter attributable to continued holiday sales into the first month. The company forecasts an EPS of $1.25 to $1.45 for the first quarter and $5.15 to $5.45 for the full year.
Cornell also mentioned in the earnings transcript plans to outline the company’s plans to continue its investments to accelerate Target’s brands and stores.
Target has been heavily diverting funds into internal investments, which resulted in a weaker net income of $1.1 billion. The company plans to invest even more by remodeling over 300 stores across the U.S., following 110 the previous year.
“While we have a lot left to accomplish, our progress in 2017 gives us confidence that we are making the right long-term investments to best position Target for profitable growth in a rapidly changing consumer and retail environment." said Cornell.