Analysts Expect Lackluster Sales From Target

Analysts Expect Lackluster Sales From Target

Analysts reportedly anticipate a decline in fourth-quarter sales from the Minneapolis-based retailer, due to its recent security breach, disappointing performance in Canada, and overall current weakness of the retail industry.

Some analysts are reportedly expecting Target to report poor quarterly sales figures on Wednesday.
 
According to Minnesota Public Radio, which cites the Bloomberg News Service, Wall Street analysts project, on average, a 5 percent decrease in sales and a double-digit drop in profits.
 
“The market's clearly concerned about the data breach and Canada,” Morningstar retail analyst Ken Perkins told MPR. “So, we don't expect it'll be Target's best quarter.”
 
The Minneapolis-based retailer’s stock has dropped 14 percent from November 21 (when Target last reported results) to the market’s close on Friday.
 
Target’s long-term outlook, meanwhile, may be more promising.
 
According to the Bloomberg News Service, Target’s relationships with its suppliers and competitive merchandise options will most likely increase its same-store sales over time.
 
“It remains a financially strong defensive retailer with a very good management team,” Matthew Lockridge, a Dallas-based fund manager at Westwood Management Corporation, told the news organization. “The earnings [Target] will report are going to have the brunt of the impact of the data breach and the continued investment in Canada, but that quarter is over.”
 
And according to a recent Star Tribune poll, roughly 82 percent of respondents are visiting Target stores as often as they did before millions of credit and debit cards were compromised.
 
Target is Minnesota’s second-largest public company based on revenue.