Target Investors to Seek Clues on Holiday Plans -- Earnings Preview

By Khadeeja Safdar Features Dow Jones Newswires

Target Corp. is scheduled to report fiscal third-quarter results before the market opens on Wednesday. Here is what you need to know:

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EARNINGS FORECAST: Analysts polled by FactSet expect adjusted earnings of 86 cents a share, compared with $1.04 a share a year earlier.

REVENUE FORECAST: Target is expected to report revenue of $16.59 billion, up from $16.44 billion a year ago.

WHAT TO WATCH:

HOLIDAY PLANS: Target has been making headway on its plan to spend $7 billion on store and digital improvements, pulling itself out of a yearlong sales slump. But the real test will be the holiday-shopping period. After a weak season last year, the company has improved its ship-from-store capabilities, remodeled locations, launched new brands and changed its promotional strategy in hopes of driving more sales. Expect to hear more about Target's plans for the coming holiday period when it reports earnings.

PRICING: Target lowered prices this year on thousands of household items, a move that helped lift store sales and shrunk the gap in prices between it and Wal-Mart Stores Inc., according to research firm Gordon Haskett. This holiday season, executives plan to cut back on some promotions, focusing on fewer and more effective discounts.

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STORE TRAFFIC: Is Target continuing to see foot traffic improving at its brick-and-mortar locations? Chief Executive Brian Cornell has said that sales rose 2% to 4% at stores it recently renovated, and last month the retailer said it plans to make over more than 1,000 stores by 2020, up from a previous estimate of 600 stores. The company hasn't said how this expanded plan would affect spending, and investors will be looking for clarification.

E-COMMERCE: Target has to strike a balance between improving its e-commerce capabilities and getting shoppers in its physical stores, something Wal-Mart is attempting to do by raising some prices on its site. Target's online strategy has included raising the minimum order for free shipping and encouraging shoppers to place bigger orders by rolling out a service in which customers can fill a box with merchandise for a flat fee. It may have other plans to discuss, or questions from analysts, when it comes to digital initiatives.

Write to Khadeeja Safdar at khadeeja.safdar@wsj.com

(END) Dow Jones Newswires

November 14, 2017 06:44 ET (11:44 GMT)