Target Corp (NYSE:TGT) stock rose 0.83% (As on May 23, 12:39:54 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the first quarter of FY 24. Comparable sales slid 3.7%, almost in line with what analysts were expecting, as the number of transactions decreased by 1.9%. “The average transaction was also down 1.9% as consumers continue to spend cautiously, particularly in discretionary categories. Gross margin increased to 27.7% from 26.3% in the prior-year quarter amid cost improvements that more than offset higher promotional markdowns, according to the company. Selling, general and administrative expenses rose to $5.17 billion from $5.03 billion year-on-year. Target’s net income inched down to $942 million for the quarter ended May 4, from $950 million, in the year-ago period. During the quarter, the company relaunched its loyalty program, Target Circle, with more than 1 million members new to the platform in the first quarter.

TGT in the first quarter of FY 24 has reported the adjusted earnings per share of $2.03, missing the analysts’ estimates for the adjusted earnings per share of $2.06. The company had reported the adjusted revenue decline of 3.1 percent to $24.53 billion in the first quarter of FY 24, missing the analysts’ estimates for revenue of $24.54 billion.  Sales declines, primarily in discretionary categories, were partially offset by continued growth in beauty.  First quarter operating income of $1.3 billion was 2.4 percent lower than last year, driven by lower sales volume. First quarter operating income margin rate was 5.3 percent in 2024, compared with 5.2 percent in 2023. First quarter gross margin rate was 27.7 percent, compared with 26.3 percent in 2023, reflecting the net impact of merchandising activities, including cost improvements that more than offset higher promotional markdown rates, combined with favorable category mix and lower book to physical inventory adjustments as compared to the prior year.

For the current quarter, Target expects adjusted EPS between $1.95 and $2.35, while the Street is looking for normalized EPS of $2.18, which is above the outlook’s midpoint of $2.15. Comparable sales are set to be in a range of flat to up 2% versus the market’s estimate for a 1.6% gain. The retailer continues to project adjusted EPS of $8.60 to $9.60 for the full year with same-store sales flat to up 2%. The Street is currently looking for normalized EPS of $9.42 and comparable sales growth of nearly 1%.