Target Plunges 12% After Missing Lowest EPS Estimate, Slashing Outlook

Tyler Durden's picture

When we discussed yesterday Reuters' report that Wal-Mart is now actively "price testing" its products, and squeezing vendors in a scramble to preserve market share while keeping margins relatively flat, we cautioned that this is the latest indication of what appears to be a pervasive "deflationary shock" among the retail industry which is caught in a vicious fight for market share. This morning's results from Target validated this observation: moments ago the retail giant reported Q4 EPS of $1.45, missing both consensus ($1.51) and the lowest Wall Street estimate ($1.47), even as Q4 revenue came largely in line with expectations of $20.7 billion, suggesting that holiday spending was indeed far worse

The internals were just as messy, with Target reporting comp sales of -1.5%, missing the -1.3% estimate, on gross margin of 26.9%

But the most troubling part of the release was the company's disappointing guidance: Target now sees 1Q adj. EPS of 80c to $1.00, far below the consensus estimate $1.33, and also over 20% below the lowest firecast (range $1.26-$1.41). The bleeding is expected to continue on the back of a "Low-to-Mid Single Digit Decline" in comp store sales in both Q1 and the full year. Also, for the full year, Target sees adj. EPS of $3.80 to $4.20, wildly missing consensus of $5.34 (range $5.05-$5.60).

CEO Brian Cornell was rather downbeat: “Our fourth quarter results reflect the impact of rapidly-changing consumer behavior, which drove very strong digital growth but unexpected softness in our stores. At our meeting with the financial community this morning, we will provide detail on the meaningful investments we’re making in our business and financial model which will position Target for long-term, sustainable growth in this new era in retail. We will accelerate our investments in a smart network of physical and digital assets as well as our exclusive and differentiated assortment, including the launch of more than 12 new brands, representing more than $10 billion of our sales, over the next two years. In addition, we will invest in lower gross margins to ensure we are clearly and competitively priced every day."

Cornell concluded that while he is confident the proposed changes will best-position Target for continued success over the long term "the transition to this new model will present headwinds to our sales and profit performance in the short term."

In other words, expect more of the same from America's biggest retailers who are now stuck in a fight for market share, even as prices continue to decline, forcing CFOs to come up with increasingly more innovative ways of preserving margins and profits.

At last check, TGT was trading 12% lower after the earnings, wiping out $4 billion in market cap and weighing in on peers such as Walmart.

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wildbad's picture

they will soon be selling used bricks and mortar

cowdiddly's picture

It's the throwing bricks and mortar part of the "recovery" that will get you.

StackShinyStuff's picture

But but but...What about "clicks and mortar?"  That was supposed to be a thing, right?

Keyser's picture

I wonder how they feel about their tranny bathroom policy now... I'm sure their investors are just ecstatic... 

E.F. Mutton's picture

"...unexpected softness in our stores"

Not to mention the unexpected hardness in your Ladies Rooms

fattail's picture

That's good funny.  Well done.  Made me laugh.

bigkahuna's picture

Perhaps the trannies will keep Target afloat?

847328_3527's picture

Target needs to announce that it'll hire 10,000 refugees if it wants to stay relevant and in the hip, pc left wing SJW market.

Edmond Dante's picture

Shouldn't sll the trannies keep it afloat? Target doesnt even mention bathrooms in article. Clueless. 

WayPastCaring's picture

I like David Stockman but he's like a hyperventilating canary in a coal mine - every sound makes him keel over. How many times has Stockman been wrong in the past few years, warning about the Apocalypse?

Bwana's picture

Yup, they are clueless. Target went off my list when they embraced the tranny bathrooms. It seems the management doesn't understand by doing this they have aligned themselves with Obama's failed presidency and policies. 

New_Meat's picture

There's the business model!!!!

Let's concentrate all of our resources on 0.08% of the local population so we can signal to all and sundry how wonderful and inclusive we are.

Very similar to the DNC strategy of "Fuck Off Whitey!!!"  Saw how well that worked.

- Ned

spastic_colon's picture

yes this.......whatever happened to majority; the libs and especially under obummer made it vogue to cater to the smallest of minority groups and hand over the majorities money to fund them.  funny how they were so proud to trot out their tranny policy but will never be able to admit its gargantuan failure!

847328_3527's picture

Target flushing their future down the toilet in the Tranny restrooms.

BarkingCat's picture

I avoid them strictly on that basis.

They showed themselves to be SJW corporation.

I hate Social Justice Weirdos, so I if I have to go into a big box discount retailer I will go to ChinaMart.

markpower49's picture

Whenever I want to urinate in a women's bathroom, I go to Target. Because only leftist filth shop there.

windywoo's picture

Bingo.  I haven't set foot in a Target store since they decided against being family friendly.

847328_3527's picture

Where I live there's a alot of Chinese-Americans with pretty little daughters and they normally patronize Target. But they were horrified at this wacko transgender/pedo policy and they have boycotted since.

Now, their shopping behavior has changed to other stores and it's doubtful they will return to Transgender Target no matter what they do.

Take years to build customer trust but only one Big Stupid policy like this can trash your reputation in a few days. What's surprising to me is how disconnected these Board of Directors are. They should have jumped on this pronto and corrected it fast. But they didn't.

Same with the gay fellow who tool over jcpennys and ran it into the ground. This year they'll also be closing dozens of stores.

You gotta wonder what the management is thinking to become so anti-American?

New_Meat's picture

insular Boards, groupthink

SBUX anyone?

codecode's picture

Target's arrogance of the policy was over-whealming.. Good riddance

Bwana's picture

I have been told Target is French owned. That alone does it for me. One of these days the fiat currencies of the world will collapse and we have deGaulle and the French to thank for fiat currencies. He almost single handed broke the Brenton Woods system and de-monetized gold.

Blankone's picture

I wonder who made bank by shorting JCP.  When he made Ellen the JCP spokesperson and symbol I did not see how he could be that stupid.

But the lesbian and homsexual groups claimed it would be a huge boom for JCP due to all the business their groups would bring.  Of course that never happened.

Bluecoffeecup's picture

According to them it's consumer behavior not related to the bathroom issue. Morons!

847328_3527's picture

'splain that to the shareholders bleeding money.

waspwench's picture

Changes in consumer behaviour are probably the principal reason for Target's problems, but to enact a ridiculous policy which alienates, at a minimum, 50% of their customer base at a time when all retailers are in trouble is indicative of a management team that is completely out-of-touch with reality.

Target is getting exactly what they deserve.

N. B. Forrest's picture

I have three girls and a wife who no longer shop there because they don't want men in the ladies' dressing room. 

 

This is to be fully expected.  For the cheaper stuff, go to Walmart, for the nicer stuff, go to Kohls. 

Potato Farmer's picture

My sister works at Kohl's.  Great plug.  Thanks!

Miss Expectations's picture

"clicks and mortar?"
No sir, "chicks with dicks"

VinceFostersGhost's picture

 

 

Maybe put in some trans bathrooms......that should turn it around.

wildbad's picture

good point..i'll run that up to management

youngman's picture

I dont go there anymore because of this...and thousands of other people feel the same way...funny how they forgot about that little stunt

j0nx's picture

Target like Starbucks and some others are failing because of their social activist policies that Americans are lashing out against. Nothing more nothing less. Good luck hearing that on the msm though...

Son of Loki's picture

Starbuck disses over 63 million Americans preferring refugees over American citizens.

And for Target, 99% of the American Mothers with cute little daughters who for some reason don't want some old pedo peeking or touching their little girl in the Womens restroom.

 

They must be very un-politically correct! How dare they!!

gaoptimize's picture

We decided to shop at Target as a last resort only after they made it clear they are aligned with the left.  As a result, we are down to ~25% of our previous patronage.

waspwench's picture

Try harder. You can do better than that.

Chuck Walla's picture

They need more LGBTQRST in the shitters. I love taking my 10-year-old granddaughter to see the old perv's dicks.

Politics over profits, that's a winning formula. Is there a bonus(boner) for how many men a manager can pack into the ladies?

UnclePhester's picture
UnclePhester (not verified) Feb 28, 2017 6:56 AM

But SODOMITES can still watch your wife and daughter in the LADIES room...which is the important thing

Cognitive Dissonance's picture

A rude awakening for me the other day while in a NC Target store at the bathrooms. Suddenly women have two bathrooms to que up to, the 'Ladies" bathroom and the 'Unisex' bathroom.

So much for male bladder control.

UnclePhester's picture
UnclePhester (not verified) Cognitive Dissonance Feb 28, 2017 9:43 AM

Go into the UNISEX one and piss all over the seat....

BandGap's picture

Yet no mention of this. People around here just simply stopped shopping at Target when they did this.

Assholes.

Son of Loki's picture

"Failing Target" is what some might say.

First, they delayed telling their cc holders they were haced and millions of confidential info was tolen.

Then the social justice/pc bathroom policy. The future looks bleak for Target unless they fire many at the top and hire management that cares abot the American middle class.

 

 

yogibear's picture

The libtards have normalized freaks and perverts. Anyone that has morals or believes in god is deemed belonging to the extreme right and should be isolated and punished.

UnclePhester's picture
UnclePhester (not verified) yogibear Feb 28, 2017 9:42 AM

all part of the ashkeNAZI jew war on whites, Christians, and heterosexuals.....

 

 

1) Steal the acquired wealth of all White Run countries. Destroy the middle class, destroy all white culture, demonize whites, Christians, heterosexuals

2) Flood all white countries with muslims, wetbax and all the scum Israel would never take.

3) Instigate a nuclear war with Russia, the last FREE WHITE RUN COUNTRY...because they won't commit suicide by INVADER!

4) ALL White countries Nuke each other, white problem solved, GREATER ISRAEL AND THE JOO WORLD ORDER CAN NOW FLOURISH!

Peter K's picture

More perverts in the lady's room should help...

bh2's picture

"rapidly-changing consumer behavior"

Is this biz-speak to avoid the word "boycotting"?

Arnold's picture

Our fourth quarter results reflect the impact of rapidly-changing consumer behavior, which drove very strong digital growth but unexpected softness in our stores.

 

I hadn't thought of that.

http://www.zerohedge.com/news/2016-11-11/real-lesson-america-grubhub-sto...