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Retail giant Target Corporation (NYSE:TGT) could show consumer trends and how the macroeconomic environment is impacting spending when the company reports third-quarter financial results on Wednesday before market open.
Here are the earnings estimates, what analysts are saying ahead of the report, and the key items to watch.
Earnings Estimates: Analysts expect Target to report third-quarter revenue of $25.34 billion, down from $25.67 billion in last year's third quarter, according to data from Benzinga Pro.
The company has beaten analyst estimates in six of the last 10 quarters, including the most recently reported second quarter.
Analysts expect Target to report third-quarter earnings per share of $1.72, down from $1.85 in last year's third quarter.
The company has beaten analyst estimates for earnings per share in seven of the last 10 quarters, including the most recently reported second quarter.
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What Analysts Are Saying: Analysts are bracing for a potential soft performance from Target in the third quarter.
Telsey analyst Joseph Feldman expects Target to report earnings per share of $1.76 and comp sales down 1.5% year over year.
"Our outlook incorporates ongoing pressure from cautious consumer spending on discretionary categories, incremental costs, including promotions and investments in technology, and ongoing headwinds from higher tariffs," Feldman said.
The analyst maintained a Market Perform rating on Target with a price target of $110 ahead of earnings.
Feldman said Target is likely to continue to focus on value and loyalty, along with its private brands and growth items like digital.
The analyst said new CEO Michael Fiddelke is focusing on merchandising, the shopping experience and technology.
Feldman said these are the "right steps to revive the business," but noted investors may have to be patient.
Bank of America analyst Robert F. Ohmes maintained an Underperform rating on Target ahead of the earnings report with a price target of $93.
The analyst said Target's sales likely slowed in the third quarter, which could lead to downside for forecasts.
"We also see higher exposure to tariffs & other headwinds for Target with less long-term potential offsets," Ohmes said.
Ohmes said Target is underperforming on digital growth and investments compared to retail competitor Walmart (NYSE:WMT) and is getting more pressure from ecommerce giant Amazon.com Inc (NASDAQ:AMZN), fighting for market share.
"We see increasing longer-term sales and margin risks for TGT on slowing digital sales growth, a lack of scale in digital advertising and 3P marketplace, elevated tariff, pricing and merchandising headwinds, and increasing competitive threats from WMT and AMZN."
On the tariffs front, Ohmes estimates that the company sources around 30% of its owned brand products from China with some segments like electronics and toys having a higher concentration.
Key Items to Watch: One of the keys to Target's second quarter performance was a 14.2% increase in non-merchandise sales, helping to offset a 1.2% drop in merchandise sales. Segment performance could be a key to Target’s third-quarter financial results.
A Placer.ai report shows that Target traffic was down 2.7% year over year in the third quarter. Traffic was down 2.5%, 0.8% and 5.0% year-over-year for the respective months of July, August and September.
This compares with Walmart’s 0.4% traffic decline in the third quarter, with traffic down 0.2% in July, up 1.9% in August, and down 0.5% in September.
While traffic doesn't 100% equal sales, the report could indicate that Walmart is taking market share from Target in the third quarter and that Target is struggling to meet analyst sales estimates.
With analysts expecting a rough third quarter, attention may quickly turn to Target's outlook and commentary. The company reaffirmed full-year guidance after second-quarter results, and investors and analysts will be watching to see if adjustments are made.
Target recently announced price reductions on over 3,000 items across food, beverage and essentials. The new prices could play into fourth quarter sales and guidance, with the retailer looking to lure in cost-conscious consumers.
The retailer also launched an AI-powered gift finder to boost holiday sales in the fourth quarter. Placer.ai data showed that Target had a 0.9% year-over-year traffic gain in October, which could suggest a potential turnaround in the fourth quarter.
TGT Price Action: Target stock is up 0.1% to $88.59 on Tuesday versus a 52-week trading range of $85.36 to $158.42. Target shares are down 35.5% year-to-date in 2025.
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