Target reports holiday sales early Q4 2024 earnings

Target raised its fourth-quarter sales forecast Thursday after more consumers turned to its stores and website for holiday shopping — particularly on days known for deep discounts.

The big-box retailer now expects comparable sales in the fiscal fourth quarter to grow by about 1.5%. That’s better than its most recent outlook that the metric would be approximately flat. Comparable sales includes sales on Target’s website and stores open at least 13 months. 

Yet the Minneapolis-based discounter did not lift its profit outlook — an indication that deals motivated shoppers. Target anticipates fourth-quarter earnings per share will range from $1.85 to $2.45 and full-year earnings per share will be between $8.30 and $8.90. Target will report full fourth-quarter earnings results March 4.

Target cut its profit guidance in early November after it posted its biggest earnings miss in two years and blamed some of its troubles on softer sales of discretionary merchandise and the costs of preparing for a short-lived port strike in October.

Target’s report is the latest glimpse into a crucial season for the industry. Data so far has suggested it went better than feared, but investors have not been impressed. Lululemon, Abercrombie & Fitch and American Eagle, for example, all raised their fourth-quarter outlooks Monday, but shares of some of those companies traded lower that day.

Nordstrom on Friday bumped up its full-year sales forecast, but only after a conservative prior outlook. And department store rival Macy’s on Monday said its sales will be at or slightly below the low end of its previously stated range of between $7.8 billion and $8.0 billion.

Holiday retail sales rose 4% year over year to total $994.1 billion for Nov. 1 through Dec. 31, according to the National Retail Federation, the industry’s major trade group. That total excludes auto dealers, gas stations and restaurants.

NRF Chief Economist Jack Kleinhenz said in a news release that the spending pace is similar to pre-pandemic growth and was driven, in part, by lower inflation compared with the year-ago holiday season. Holiday spending rose an average of 3.6% from 2010 to 2019.
Yet shoppers are still looking for deals, he added.

“Even though consumers are still relatively healthy and there was a notable increase in spending, they remain budget conscious,” he said.

Discounts and sales events have remained a significant sales driver, as consumers emerge from a more than two-year stretch of high inflation. It’s unclear how much those deals will cut into Target’s and other retailers’ profit margins, and whether sales will keep improving if promotions fade away.

In the combined months of November and…