By most measures, Target had a successful Q3. The retailer saw quarterly adjusted earnings per share ($0.91), revenue ($16.67 billion) and same store sales growth (0.9%) beat estimates, with digital sales jumping 24%. In a November 15 interview with CNBC’s “Squawk on the Street,” Target CEO Brian Cornell noted: “We feel really good about our performance, the progress we’ve made — and I feel really confident that we’ve got all of the elements working well as we go into Q4.”
But despite these promising results and Cornell’s upbeat response, projected numbers for the holiday season fall short of analysts’ expectations. Target forecast adjusted earnings of $1.05 to $1.25 per share for Q4, considerably below the average analyst estimate of $1.24, leading the retailer’s stock to dip more than 9% after the earnings reveal.
Target’s increased hiring for the season likely has been a major concern for shareholders seeking bigger profits. The retailer has hired 100,000 temporary holiday workers, up from 70,000 in each of the prior four years, and raised its minimum hourly wage this year by 10%.
CEO Cornell: “Stores Still Matter”
In the CNBC interview, Cornell said he was surprised by the shareholders’ reaction, but re-emphasized the importance of brick-and-mortar stores. Cornell noted that more than half of Target’s digital sales growth is enabled by its stores.
“I feel good about…