Target unveils "cautious" full-year sales forecast amid tariff-related uncertainty
Investing.com - Target (NYSE: TGT) unveiled a cautious outlook for sales growth in its current financial year as the big-box retailer flagged uncertainty surrounding U.S. President Donald Trump's trade policy.
The Minnesota-based group said it now expects comparable sales growth to be "in a range around flat," compared with Bloomberg consensus projections for an uptick of 1.7%, flagging a "small decline" in net sales in February.
In light of last month's sales dip and ongoing murkiness around the consumer spending environment, "combined with tariff uncertainty and the expected timing of certain costs within the fiscal year," Target said it now anticipates "meaningful" year-on-year profit pressures in the first quarter "relative to the remainer of the year."
“During February, we saw record performance around Valentines Day. However, our topline performance for the month was soft, as uncharacteristically cold weather across the U.S. affected apparel sales, and declining consumer confidence impacted our discretionary assortment overall,” said Chief Financial Officer Jim Lee in a statement.
Lee added that Target expects to see a "moderation" in this trend as apparel sales respond to warmer weather in the U.S. and shoppers spend more around upcoming holidays like Easter.
"We will continue to monitor these trends and will remain appropriately cautious with our expectations for the year ahead,” Lee said.
Still, Target delivered a 1.5% increase in comparable sales in the fourth quarter, topping estimates for an uptick of 1.18%, thanks in part to strength in its items like apparel, toys and sporting goods during the crucial holiday shopping season. The figure had fallen by 4.4% a year earlier.
Quarterly core profit before interest, taxes, depreciation and amortization also came in at $2.26 billion in the three months ended on February 1, higher than analysts' forecasts of $2.14 billion.
Shares in Target rose by more than 4% in premarket U.S. trading on Tuesday.