Target Corp. TGT released its fourth-quarter 2018 financial results before the opening bell on March 5. The company benefited from a solid holiday shopping season that saw increased customer traffic and comparable store sales growth.
By the numbers
For the three months ending Feb. 2, the company’s adjusted earnings per share were $1.53, which reflected 11.7% growth on a year-over-year basis. Revenue was flat at $22.98 billion.
Comps grew 5.3% in the reported quarter. Digital sales climbed 31%, contributing 2.4 percentage points to quarterly comps. Brick-and-mortar sales, on the other hand, grew 2.9%.
In an interview with CNBC's "Squawk Box," Chairman and CEO Brian Cornell said he feels "great about the progress, the investments that we've made in the stores, our brands and importantly in our team have paid off."
"And I think that we saw that in our full year 2018 results, but more importantly the guidance for next year," he added.
Road ahead
The company plans to remodel roughly 300 stores this year and another 300 stores in 2020. In addition, it plans to open more small-format stores in cities as well as on college campuses this year.
Target is also investing in its own in-house brands. For instance, it announced three new lingerie and sleepwear brands to compete with L Brands' (LB) Victoria’s Secret and recently entered a deal with Vineyard Vines to sell exclusive merchandise in its stores.
Guidance
The big-box retailer projects earnings per share to range between $5.75 and $6.05 in fiscal 2019. It also expects a low-to-mid-single-digit increase in same-store sales as well as a mid-single-digit increase in net income.
“We have been driving an ambitious agenda to transform our company, evolve with our guests and drive strong growth,” Cornell said. “On every count we’ve been successful, and as we enter 2019, we will continue to lead the industry by adapting, innovating and delivering more for our guests and shareholders.”
Last word
In addition to solid holiday sales, the retailer's fourth-quarter numbers were supported by the investments it has made in remodeling its stores as well as offering delivery services, revamping its website and developing new products. If Target continues to effectively execute its ambitious tranformation plans, it will see success for years to come.Ă‚
Disclosure: I do not hold any positions in the stock mentioned.
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