Target (NYSE:TGT) Wins Q3

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By Joseph Carducci on November 20, 2014 Company

The new Chief Executive Brian Cornell is proving himself as a good addition to the Target Corp. (NYSE:TGT) team. The company has posted surprisingly good figures for Q3, which exceed its own expectations as well.

An increase in profits to 3.1% has been observed for the third fiscal quarter, and sales at Target (NYSE:TGT)’s US stores has increased by 2.1%, which is quite ahead of the company’s expectations of a raise of 1% for the month of August, in same-store sale category. The reason for these great figures is exceeding sales in the back-to-school and Halloween season sales. However, Target (NYSE:TGT) is not the only retail store that can bask in the success due to the holiday sale season, several other retailers have also experienced increased sales.

If observed closely, Target (NYSE:TGT) hasn’t succeeded in attracting shoppers, because of a rather dull range of products with fewer options at offer. The shifting trends towards online shopping has also had adverse effects on businesses, such as that of Target (NYSE:TGT), which encourage store shopping and don’t have a very active cyber presence.

Target (NYSE:TGT)’s new Chief Executive is now working on shifting focus on to categories that are expected to draw more customers, and in turn better revenues. The ex PepsiCo Inc. (NYSE:PEP) executive promises to strengthen departments such as, fashion, home, beauty, baby products and several other categories. The retailer has brought this strategy to the table and hopes that it will help Target (NYSE:TGT) make a significant appearance among its competitors.

Wal-Mart (NYSE:WMT), a rival brand released its Q3 report, just a week before Target (NYSE:TGT)’s figures for the same period were posted. The former reported better figures, as customers had more cash on hand to spend due to reduction in gas prices.

Even with boastful figures, the retail market seems to be facing the coerced issue of volume of shoppers declining with each passing day. There has been a decline of 0.4% in the amount of transactions conducted by shoppers on shop floors in Q3. This decline trend is spread over eight consecutive quarters.

Target (NYSE:TGT) is also finding it hard to establish itself in Canada due to issues with inventory struggles have left lesser product lines to offer. In addition, the Canadian customer population seems to have rendered the retailer too expensive. For Q3, the established-store sales went up a meagre 1.6%, which was also due to the usual hype that surrounds a newly opened store. However, Canada is not proving to be a lucky location for the retailer, as it ended up losing $211 million in the previous quarter, which has brought the losses lump sum over the $2 billion margin set for the Canadian expansion.

For the quarter ending Nov. 1, Target (NYSE:TGT) reported earnings exceeding from $352 million to $341 million. This brings the share price up at 55 cents from the previous 54 cents per share.

Company shares increased by 1% over the previous year, and rose 3% to $69.55 in initial transaction.