Nordstrom and Ross Stores issued strong outlooks after smashing views for the fourth quarter late Tuesday. Following the lead of Target stock on Tuesday, Ross and Nordstrom stock both spiked in premarket trading.
On Tuesday, Target gave an upbeat outlook after both Target and Kohl's delivered a mixed fourth-quarter report. Target stock soared 9.8% Tuesday.
Urban Outfitters slipped 0.2% early Wednesday, after reporting weaker-than-forecast fourth quarter results late Tuesday.
Target Earnings
Estimates: Analysts projected year-over-year earnings up 6.7% to $2.85 on a 10.5% sales gain to $31.32 billion, according to FactSet. Same store sales were seen rising 10% in Q4 vs. a 13% gain the prior quarter and a 19% gain in the year-ago quarter.
Results: EPS jumped 20% to $3.19, while revenue came in light, increasing 9% to $30.996 billion. Same store sales were also below target, up 8.9% for the quarter.
Outlook: For 2022, the big-box retailer expects low-to-mid single-digit revenue growth and high single-digit growth in adjusted earnings per share, with profit results improving as the year goes on. Analysts were expecting Target earnings to fall nearly 3% in 2022 and revenue to rise just 2%, FactSet said.
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Target Stock
Shares of Target gapped up 9.8% to 219.43 in Tuesday's stock market trading. Target stock crossed above the 50-day moving average but remains below the 200-day line, with no buy point so far . The relative strength line for TGT stock has bolted higher after a slide, according to MarketSmith charts.
The RS line, a strength indicator for stocks, rallied along with Target stock for parts of 2021. A rising RS line, the blue line in the chart shown, means a stock is outperforming the S&P 500 index.
Last week, Macy's also offered an upbeat outlook for 2022, while beating fourth-quarter views. The company expects positive momentum and strong consumer demand to offset macro headwinds from inflation, supply chain pressures and labor shortages.
Other Retail Earnings
- Early Tuesday, Kohl's posted a 0.9% EPS decline to $2.20 on a 6% revenue increase to $6.499 billion. Same-store sales grew 11.9%. Analysts were expecting Kohl's earnings of $2.10 per share and revenue of $6.602 billion. Same-store sales were seen rising 13% vs. a 15% gain the prior quarter.
- Late Tuesday, Nordstrom delivered a 15% EPS increase to $2.59, crushing estimates for $1. Sales grew 23% to $4.486 billion, also beating views. SSS rose 20%, in line with views, and accelerating from an 18% gain the prior quarter. Nordstrom's forecast for full-year profits and revenue also came in above estimates.
- Late Tuesday, Ross Stores reported EPS of $1.05, above the 95-cent target. Sales jumped to $5.02 billion, easily clearing expectations for $4.945 billion.
- Late Tuesday, Urban Outfitters delivered EPS of 41 cents, below views for 50 cents. Revenue rose 22% to $1.33 billion, in line with estimates.
Kohl's stock rose 0.5% early Wednesday. Nordstrom soared 31%, in early trade after closing down nearly 6%. Urban Outfitters slid 0.2%. Ross rallied 6.3%. Target stock dipped 0.6%.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
