Target (TGT) posted better-than-expected fourth-quarter results, although it warned that the uncertainty around tariffs would weigh on current-quarter results.
The company reported fourth-quarter adjusted earnings per share (EPS) of $2.41 on revenue that declined 3% year-over-year to $30.92 billion. Analysts polled by Visible Alpha expected $2.26 and $30.77 billion, respectively.
Target’s comparable sales rose 1.5%, above projections of 1.39% growth. In January, the company lifted its comparable sales projection to 1.5% growth from “approximately flat” following Q3 on the back of a stronger-than-expected holiday shopping season.
Target shares were little changed in premarket trading following the report. They entered Tuesday down 22% over the past year.
Target Expects Q1 ‘Profit Pressure’
“In light of ongoing consumer uncertainty and a small decline in February Net Sales, combined with tariff uncertainty and the expected timing of certain costs within the fiscal year, the Company expects to see meaningful year-over-year profit pressure in its first quarter relative to the remainder of the year,” Target said.
President Donald Trump’s 25% tariffs on Canada and Mexico, and the doubling of 10% levies on goods from China, took effect Tuesday.
For the full year, Target sees net sales growth “in a range around 1 percent,” comparable sales growth “in a range around flat,” and adjusted EPS between $8.80 and $9.80. Analysts were looking for sales growth of 2.66%, comparable sales growth of 1.81%, and adjusted EPS of $9.30.