Sylvia Jablonski reacts as Target posts a surprise increase in profit

Target Corp (NYSE: TGT) opened about 13% up on Wednesday after reporting an unexpected increase in quarterly profit on “disciplined inventory and expense management”.

Target’s guidance for the current quarter

The retail behemoth also issued guidance for the current quarter that was somewhat in line with expectations.

Target now forecasts its per-share earnings to fall between $1.90 to $2.60 on an adjusted basis on a mid-single digit percentage decline in same-store sales. On CNBC’s “Squawk Box”, Sylvia Jablonski – the Chief Executive of Defiance ETFs said today:

Analysts, in comparison, had called for $2.23 a share and a 5.3% decline in comparable sales. Target stock is still down 30% versus its year-to-date high.

Target Corp Q3 financial highlights

• Earned $971 million versus the year-ago $712 million
• Per-share earnings also increased from $1.54 to $2.10
• EPS adjusted for one-time items also printed at $2.10
• Sales slipped 4.3% year-over-year to $25 billion
• Consensus was $1.47 a share on $25.28 billion sales

The earnings report disclosed a 4.9% hit to same-store sales in the recently concluded quarter versus a wider 5.3% decline expected. Jablonski added on Wednesday:

What else was noteworthy?

Other notable figures in the earnings press release include cost of sales and value of inventory which were down 7.8% and 13.9%, respectively.

Target Corp did see weakness in discretionary categories while “frequency” items continued to be strong in Q3. According to Sylvia Jablonski:

Number of transactions slid 4.1% and the transaction amount was smaller by 0.8% on average in the third quarter, as per the retail giant.