Target Corporation (TGT) stock is trading 20% lower today after the company’s quarterly earnings report hit the wires this morning.
The company reported a sharp miss in earnings, decelerating revenue growth, and a gloomy outlook for the holiday season. The grim news has investors selling Target stock with heavy volume.
In October, Walmart's reported a strong quarterly performance. The optimism surrounding that discount retailer carried over the Target stock.
Unlike Walmart, where 60% of U.S. sales come from groceries, Target has a larger stake in general merchandise, which forms nearly a quarter of its revenue. This difference exposed Target to more significant impacts from inflation, affecting consumer purchasing behavior.
For the third quarter, Target's revenue saw a slight increase of 0.9% year-over-year to $25.23 billion. That number is a slowdown from the 2.7% growth observed in the previous quarter.
Looking ahead, Target's outlook remains dim with flat comparable store sales expected in Q4 and earnings per share forecasted between $1.85 and $2.45. That forecast marks a 28% decline year-over-year at the midpoint.
The company has also revised its fiscal year 2025 earnings per share guidance downward from $9.00-$9.70 to $8.30-$8.90.
There were some positives in Target's quarter.
Target's digital sales grew by 11%, driven by a nearly 20% increase in same-day delivery services and double-digit growth in its drive-up service.
Additionally, categories such as Beauty saw over 6% growth in comparable sales, while Food & Beverage and Essentials categories maintained low single-digit growth.
Target’s price drop moves the stock below its six-month trading range with a bearish bias looking forward.
Today’s drop puts the stock back in a long-term bear market trend as Target shares are trading below their 20-motnh moving average.
With the price of Target stock at $120, investors should prepare for further declines to $100.
Williams-Sonoma Inc. (WSM) made a strong advance today following strong third-quarter earnings report that beat expectations.
The company, known for its upscale home furnishings and owner of the Pottery Barn brand, saw its stock jump 27%, reflecting investor excitement over its robust financial performance and optimistic outlook.
While most retail companies are relying heavily on promotional marketing Williams-Sonoma has benefitted from simple marketing. The Company successfully maintained strong merchandise margins by strategically opting out of widespread discounting practices and focusing on its core lines.
This strategy paid off, contributing to a gross margin expansion of 46.7% in the third quarter. That growth puts Williams-Sonoma in the top growth category for retailers.
Williams-Sonoma reported a 2.9% decrease in comparable brand revenue, an improvement from the 3.3% decline seen last quarter.
Pottery Barn Kids and Teens were the as a bright spot, posting a positive comp growth of 3.8%. The Williams-Sonoma brand itself was nearly stable with only a slight decline of 0.1%.
Looking ahead, Williams-Sonoma is optimistic about the upcoming holiday season, which is usually a make-or-break period for retailers.
The company has adjusted its fiscal year 2025 revenue upwards to $7.52-$7.63 billion from the previous range of $7.44-$7.63 billion.
Furthermore, it anticipates comparable sales to improve, projecting a decrease of 4.5% to 3.0%, an enhancement from earlier forecasts of a 5.5% to 3.0% decline.
Shares of WSM surged to new all-time highs following the earnings beat.
The stock jumped above its 50- and 200-day moving averages on Wednesday. Those key trendlines had formed solid technical support at $10 after Williams-Sonoma shares had traded in a wide range for the last three months.
With today’s positive results and outlook, investors should target prices of $225 for the specialty retailer.
Marathon Holdings (MARA) tacked on another 15% of gains on Wednesday as Bitcoin prices continued their move higher.
MARA stock as seen increased trading volume over the last week as investors crowd into the stock.
The Bitcoin miner is now 50% higher in value since the Presidential elections earlier this month. Bitcoin continues its rally as investors embrace President-elect Trump’s positive view and outlook for cryptocurrency.
Marathon Holdings is the largest miners of Bitcoin with operations South Dakota, Nebraska, Montana, and Texas.
Owning one of the largest deposits of Bitcoin, Marathon Holdings holds a long-term high degree of correlation with Bitcoin prices. From a shorter-term perspective, the stock is more volatile than Bitcoin prices.
MARA shares are now back above their bullish trending 200-day moving average.
Unlike Bitcoin, Marathon shares are well off their all-time highs. The stock’s highs were struck in November 2021 in the midst of the Bitcoin craze.
Shares of Marathon are in a long-term bull market territory. That said, investors looking to invest in Bitcoin may find a friendlier option in one of the many Bitcoin ETFs.
