Target Corp (NYSE:TGT) stock fell 0.36% (As on November 20, 11:22:49 AM UTC-4, Source: Google Finance) after the company reported third-quarter earnings that beat Wall Street expectations on a per-share basis, even as revenue and comparable sales declined amid persistent consumer pressures. The merchandise sales while declined 1.9% to $24,752 million, while non-merchandise sales grew 17.7%, fueled by strong growth in Roundel advertising, Target Circle 360 memberships and marketplace contributions. Meanwhile, comparable sales decreased 2.7%, following a 1.9% decline in the preceding quarter. Comparable sales reflected a drop of 3.8% in comparable store sales but an increase of 2.4% in comparable digital sales. Digital momentum was led by more than 35% growth in same-day delivery via Target Circle 360. Food & Beverage and Hardlines delivered positive comparable sales growth, while discretionary categories remained pressured as consumers continued to prioritize value and necessity. Traffic, or the number of transactions, dipped 2.2%, while the average transaction amount slid 0.5%. Target ended the quarter with cash and cash equivalents of $3,822 million, long-term debt and other borrowings of $15,366 million, and shareholders’ investment of $15,501 million. Net earnings fell 19.3% to $689 million. Despite the slowdown in overall sales, Target’s disciplined inventory management helped reduce merchandise inventories by 1.8% to $14.9 billion.

TGT in the third quarter of FY25 has reported the adjusted earnings per share of $1.78, beating the analysts’ estimates for the adjusted earnings per share of $1.76, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue decline of 1.5 percent to $25.27 billion in the third quarter of FY25, missing the analysts’ estimates for revenue of $25.36 billion. Gross margin came in at 28.2%, down slightly from 28.3% reported last year driven by increased markdowns and mix pressure were mostly offset by lower inventory shrink, higher advertising revenues, and operational efficiencies in supply chain and digital fulfillment. The adjusted operating margin rate was 4.4%, down 20 basis points from the year-ago quarter.

Additionally, the company repurchased $152 million worth of shares, retiring 1.7 million shares at an average price of $91.59. Target still has approximately $8.3 billion remaining under its August 2021 share repurchase authorization.

The company company reaffirmed its fourth-quarter sales outlook. It continues to expect a low-single-digit decline in sales. Adjusted earnings are projected in the band of $7.00-$8.00 per share (versus the prior estimate of $7.00-$9.00), while GAAP earnings per share are anticipated in the range of $7.70-$8.70.