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Target sales jump 23% as exclusive brands, curbside pickup draw in shoppers

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Shoppers at a Target store in New York.
Scott Mlyn | CNBC

Target will report its fiscal first-quarter earnings on Wednesday before the bell.

Here’s what Wall Street is expecting, according to Refinitiv consensus estimates:

  • Earnings per share: $2.25
  • Revenue: $21.81 billion

The big-box retailer saw significant growth during the pandemic, as shoppers turned to its stores for everything from groceries to workout clothes and picked up online orders in the parking lot. It reported many eye-popping numbers in the fiscal year, including sales growth of more than $15 billion — larger than its total sales growth over the previous 11 years. Target’s comparable sales, a key metric that tracks sales at stores open at least 13 months and online, grew 19.3% compared with the prior year.

Those results have raised expectations and set the company up for tough year-over-year comparisons. However, the momentum really got underway in the second quarter of 2020.

That means Target will face more favorable comparisons in the first quarter. When lockdowns hit a year ago, Target customers initially skipped over many discretionary, higher-margin items like apparel and the retailer’s labor costs ballooned. The company scrambled to adapt as consumers shopped online and bought more food and electronics as they worked from home.

Other retailers’ earnings reports bode well for Target. Walmart, Home Depot and Macy’s beat Wall Street’s expectations for the first quarter. The companies attributed strong sales, in part, to customers having more money in their pockets from stimulus checks, which they received in March. Walmart and Macy’s said customers are also buying items like luggage and teeth whitener as they travel and go to parties again.

Target has not provided a forecast for the year, saying the pandemic has made it too difficult to predict consumer spending.

As of Tuesday’s close, Target shares have risen about 17% so far this year. Its shares closed at $206.43 on Tuesday, bringing its market value to $102.71 billion.