Target Meets Expectations, Wal-Mart Doesn’t
Wal-Mart predicted that it will miss Wall Street expectations for its current-quarter earnings as a result of a drop in consumer spending. On the other hand, Target’s earnings exceeded Wall Street expectations.
Target Corp.’s profit for the first quarter increased by 15% thanks to a large growth in sales. The company made $494 million, compared to $432 million for the same period last year.
Target exceeded the expectations of Wall Street analysts. Most thought that Target’s earnings would be somewhere in the 53 – 54 cent per share range. Target actually reported 55 cents per share.
Target’s credit card operations were another factor in the company’s earnings increase. The company’s Credit card revenue went up 12.6% to $321 million. Pretax profit from these operations went up 27.9%.
The company expects second quarter earnings to match industry analysts’ predictions of 53 cents per share.
Wal-Mart’s first-quarter earnings took a hit as a result of the consumer spending drop, and the company doubts that it will hit its full-year targets as well. Wal-Mart expects its second-quarter earnings to be between 63 cents to 67 cents per share. Analysts were expecting 70 cents a share.
President and CEO Lee Scott comments on the company’s first-quarter results, “We achieved record results in the quarter. Yet with higher gasoline prices and a cooler and wetter spring than normal, we missed our plan. We are making the necessary adjustments and I anticipate better results in the second half of the year.”