Reducing goals due to poor earnings, guidance for consumers under pressure; TJX explodes

Shares of Target fell early Wednesday morning after the retailer failed to report first-quarter earnings and fell. Meanwhile, TJX (TJX) hit a new record high following its report on Wednesday morning.

Colleagues, sellers BJ’s Wholesale Club (B.J.) i Ross Stores (ROST) are also on board.

Objective (TGT) reported a 1% decline in earnings to $2.03 per share, while revenue fell 3.1% to $24.53 billion.

FactSet analysts expected earnings to rise 1 cent year over year to $2.06 per share. Revenue was projected to decline to $24.52 billion.

Comparable sales fell 3.7% in the first quarter, which was in line with Target’s estimates based on fourth-quarter results.

The retailer expects second-quarter adjusted earnings of $1.95 to $2.35 per share, compared with $1.80 per share last year, with growth unchanged to 2%. But Wall Street had projected an earnings target of $2.20 per share.

The discount giant forecast full-year adjusted earnings of $8.60 to $9.60 per share. However, the midpoint of $9.10 is well below FactSet’s view of a 6.2% increase to $9.49 per share.

On Monday, Target announced it was cutting prices on about 5,000 everyday items, from milk, snacks and fresh produce to diapers, paper towels and pet food. About 1,500 reductions have already been made, with more to follow in the summer. Target says it routinely adjusts prices to stay competitive.

“We know consumers feel the pressure to get the most out of their budget, and Target is here to help them save more,” Rick Gomez, executive vice president and chief food, lifestyle and beauty officer, said in the earnings release.

Target stock

Target shares fell 8.3% early Wednesday, marking a four-day decline.

TGT stock on Tuesday undercut its eight-week flat base with a buy point of 181.86. The base is about 14% deep, MarketSurge charts show. A decline of more than 15% – i.e. below 154.58 – would mean that this is no longer a flat base, but general consolidation.

Target shares are up 9.4% this year through Tuesday’s close.

TJX Earnings

TJX reported a 22% increase in earnings to 93 cents per share, topping the FactSet benchmark of 88 cents per share and marking seven consecutive quarters of growth. Net sales increased for the sixth consecutive quarter and were in line with forecasts, growing 6% to $12.48 billion.

TJX announced that first quarter 2025 consolidated comparable sales increased 3%, driven by 4% growth at HomeGoods stores in the U.S. and TJX locations in Canada.

The company has guided for comparable sales growth of 2% to 3% in both the second quarter and fiscal 2025. TJX expects second-quarter earnings to be in the range of 88 cents to 90 cents per share, below analyst forecasts of 94 cents . The full-year earnings range of $4.03 to $4.09 per share also missed expectations for growth of 6.5% to $4.11 per share.

TJX shares were up 6.5% early Wednesday. The stock hit an all-time high and hit a buy point at 102.04, marking a 13-week double-bottom base.

TJX shares are up 4.2% so far this year through Tuesday.

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Other revenues from retail sales

Elsewhere, BJ’s Wholesale, a chain of member stores, publishes its results early Thursday evening, followed by discount clothing retailer Ross Stores after the market closes.

Analysts forecast BOJ’s earnings to fall 2.4% to 83 cents per share on revenue growth of 2.8% to $4.86 billion.

BJ stock is in a buy zone amid major consolidation for almost a year. In early March, the stock broke above a 78.88 buy point.

Wall Street expects Ross’ earnings to rise 23.9% to $1.35 per share, slowing after three quarters of accelerating growth. Sales grow 7.4% to $4.83 billion.

Ross Stores is trading just above the 200-day line and has been declining since early March.

Costco Wholesale (COST) will be released next week and earnings will be known on May 30. COST stock is trading in a 787.08 cup-based buy point range.

Retail sales results this quarter have so far exceeded soft expectations. Walmart (WMT) broke out last week after beating estimates with earnings rising 22%. Walmart noted that in the face of price inflation, it continues to attract new and more frequent customers while attracting higher-income earners. Dow Jones giant also said it expects full-year earnings and revenue to be at or slightly above previous forecasts.

Lowe (LOW) reported a 17% decline in first-quarter earnings on Tuesday, but it still beat analyst forecasts. Compete Home warehouse (HD) reported better-than-expected earnings last week, although the company’s EPS fell 5%. Both Lowe’s and Home Depot maintained their full-year forecasts. Elsewhere, Macy’s (M) beat earnings estimates and raised its earnings outlook on Tuesday, despite a nearly 52% decline in EPS. The legacy department store said it was in the “early stages” of improving its performance.

However, shares of Home Depot and Lowe’s fell on the results, while shares of Macy’s rose slightly, although they still remain below the 50-day line.

You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison

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