Target Stock Tumbles on Earnings Miss

Stocks have plummeted since the beginning of October. And that decline is a predictor of economic troubles ahead for the U.S. economy. Target Corporation (TGT) stock dropped more than 9 percent on Tuesday after the company reported higher-than-expected costs and margins and missed Wall Street earnings expectations. Analysts say there are still plenty of things to like about TGT stock despite the mixed quarter. Target reported adjusted earnings per share of $1.09, below consensus analyst estimates of $1.12. Revenue of $17.82 billion narrowly beat Wall Street expectations of $17.80 billion. Revenue was up 5.6 percent from a year ago. Same-store sales were up 5.1 percent, slightly below the 5.2 percent growth analysts had expected. Same-store sales growth was driven by a 5.3 percent increase in store traffic, down from a record 6.4 percent growth last quarter. Average transaction size was down 0.2 percent in the third quarter. One of the few major bright spots for TGT stock investors in the third quarter was digital sales growth of 49 percent. Digital sales represented just 6 percent of total sales in the quarter. “We plan to leverage our current momentum into 2019, when we'll achieve greater scale across the full slate of our initiatives - creating efficiencies and cost-savings, further strengthening our guest experience and positioning Target for profitable growth in the years ahead,” CEO Brian Cornell says in a statement. Looking ahead, Target issued fourth-quarter same-store sales growth guidance of 5 percent, roughly in-line with its year-to-date performance. Target also reiterated its previous full-year EPS guidance of between $5.30 and $5.50. Target previously guided for full-year same-store sales growth of 4.8 percent. The company said it will be providing investors with a post-holiday financial update on January 10, 2019.