People leave Target Store in Midtown Manhattan in New York on August 19, 2020.
Eduardo Munoz Alvarez | Corbis News | Getty Images
Target will report its fourth quarter earnings on Tuesday before the bell as it seeks to maintain earnings as the pandemic tailwind wears off.
The retailer will host a virtual investor day on Tuesday to share its strategy for the coming year.
Based on an analyst survey by Refinitiv, Wall Street expects the following for the quarter:
Adjusted EPS: $ 2.54 expected Revenue: $ 27.48 billion expected
Target has attracted more customers with its e-commerce offerings and wide range of merchandise, from cereal to training pants, as competitors like Macy's and Kohl's stores temporarily closed and sales fell during the pandemic recorded. The big box retailer said it gained around $ 6 billion in market share in the first three fiscal quarters of the year.
Roadside pickup and same day home delivery of online purchases have become particularly popular as shoppers have sought easy and safe ways to restock their kitchens and purchase other items.
Target has already seen revenue growth over the holidays, which is typically a key revenue driver for the fourth quarter. Sales in stores that have been open for at least 13 months and are online increased 17.2% in November and December compared to the same period last year. Customers bought from the company more often and then bought more. The combined online and in-store transactions increased 4.3% and the average tickets increased 12.3% year over year over the two month period.
Analysts expect the retailer's sales in the same store to grow 16.8% in the fourth quarter, according to StreetAccount's estimates.
In the coming months, Target will face challenging comparisons due to the increased level of sales during the global health crisis. It has to hold on to customers and their wallets as Covid-19 cases decline and more Americans are vaccinated, which could lead people to potentially return to old habits. Instead of consolidating trips in a Target store or on its website, shoppers can spend the weekends again at the mall or invest more money in restaurants, the movies or while traveling.
As of Monday's close of trading, Target shares were up nearly 81% over the past year, bringing the company's market value to $ 93.19 billion.
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