Market Overview

Target and Wal-Mart Head in Different Directions After Earnings

Big-box retailers Target (NYSE: TGT) and Wal-Mart (NYSE: WMT) both released their fiscal third-quarter earnings results prior to the opening bell on Thursday. During the subsequent trading session, the stocks went their separate ways. Target shares were trading up nearly two percent to $62.49 heading into the closing bell, while Wal-Mart had lost a little less than four percent to $68.75. While Target remains near 52-week high levels, Wal-Mart has now sunk to a multi-month low. Year-to-date, however, both stocks have performed well with TGT rising almost 22 percent and WMT adding 15 percent.

For the fiscal third-quarter, Target reported a 15 percent increase in earnings and a three percent rise in revenue. Net income was $637 million or $0.96 per share, compared to $555 million or $0.82 per share, in the year ago period. On an adjusted basis, which is comparable to analysts' consensus, earnings per share were $0.90 versus $0.86 last year. This easily beat Wall Street analysts' consensus EPS estimates of $0.79.

Total revenue in the quarter was $16.93 billion from $16.40 billion in last year's third-quarter. This was in-line with Wall Street consensus revenue estimates of $16.93 billion.

Looking ahead to Q4, Target said that it expects adjusted earnings per share of $1.64 to $1.74. This is above analysts' current consensus of $1.51 per share on revenue of $22.66 billion.

Wal-Mart reported that its net income for the third-quarter was $3.64 billion or $1.08 per share, compared to $3.34 billion or $0.96 per share, in last year's corresponding quarter. This came in ahead of Wall Street consensus EPS estimates of $1.07 by a penny.

Sales in the period were up 3.4 percent to $113.93 billion versus $110.23 billion last year. This missed Wall Street consensus revenue estimates of $114.95 billion. On a constant currency basis, sales were up 4.9 percent to $114.9 billion.

Looking ahead to fourth quarter, Wal-Mart said that it sees EPS in a range between $1.53 to $1.58, which is below current consensus of $1.59. The company also said that it expects comparable store sales growth at Wal-Mart of one to three percent.

For the full-year, Wal-Mart tightened and reaffirmed its previous guidance calling for earnings per share between $4.88 and $4.93. Previously, the company had guided for full-year EPS of $4.83 to $4.93. This is below current analysts' consensus estimates of $4.94 by a penny.

"Our disciplined approach to operating the business and to the productivity loop drove profitability and expense leverage. Our fundamentals are strong, and we are well-positioned for the fourth quarter, including innovative plans to drive traffic, especially in our U.S. stores," President and CEO Mike Duke said in a statement.

Posted-In: Earnings News Guidance Intraday Update Movers Trading Ideas Best of Benzinga

 

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