Target Stock Doesn't Look Like a Great Deal
Retailer Target (NYSE: TGT) is making progress in working through its post-pandemic hangover. The company aggressively used discounts last year to clear out inventory, knocking down its profits in the process. Earnings per share (EPS) plunged nearly 60% in 2022, even as sales edged higher.
While overall inventory was down just 3% year over year at the end of 2022, inventory in discretionary categories was down 13%. With an unpredictable economy, sky-high inflation, and rising interest rates putting pressure on consumers, Target is positioning itself to ride out the storm by focusing on food, beverage, beauty, and household essentials.
The retailer expects the picture to improve in 2023, although the days of heady sales growth are over for now. Target expects comparable sales to be roughly flat this year, plus or minus a few percentage points. With much of the inventory-related pain behind it, the company guided for a significant improvement to the bottom line. Per-share profit is expected to come in between $7.75 and $8.75, compared to $5.98 in 2022.
Source Fool.com
