Target stock fell on Wednesday, even as the big-box retailer reported a jump in holiday sales and encouraging trends so far this month, helped by big gains in digital sales as the coronavirus pandemic reshaped the shopping landscape.
Discount retailer Big Lots (BIG) also fell, after its fourth-quarter profit forecast came up short of expectations. A day earlier, teen-centered discount retailer Five Below (FIVE) gave a more upbeat fourth-quarter forecast.
Discount giant Walmart (WMT) will make a presentation at the CES tech show Wednesday. The Dow Jones giant will likely tout digital and tech innovations and developments, but could give an indication of holiday sales. WMT stock dipped 0.3%. Walmart stock is in a flat base, rebounding from its 50-day line this week.
Target (TGT) said its same-store sales for November and December increased 17.2%, with digital comparable sales racing 102% higher. The chain saw its biggest sales growth in home goods, and said it gained market share in all of its main merchandising categories.
Sales on Target’s same-day services during the holidays — like pickups for online orders and its grocery delivery service Shipt — put up a 193% gain.
Target added that it has seen “continued strong sales trends in the new year.”
Customer traffic rose 4.3%, even as the pandemic leads stores to cap crowds and keeps other customers at home. That figure is a slight dip from the 4.5% increase seen in Target’s third quarter. Target stock jumped on those results.
Target stock slipped 1.15% to close at 196.82 in the stock market today. Earlier, shares reached a record 199.96.
TGT stock is extended from a 181.27 buy point from a flat base, according to a MarketSmith analysis. The flat base is part of a base-on-base pattern, really a base-on-base-on-base.
Shares rallied 39% in 2020, as stores remained open during the pandemic and investments in its digital and delivery business paid off, attracting customers wary of venturing out of the home to shop.
Target stock has a strong 97 Composite Rating. Its EPS Rating is 92. The stock’s relative strength line reached a record high on Tuesday.
The 2020 holiday season was marked by earlier promotions, and signs that holiday-shopping demand had been pulled forward earlier in the year.
Big Lots Falls
Elsewhere, Big Lots, which sells items like indoor and patio furniture, home decor and electronics, said it expected to earn $2.40-$2.50 per share during the fourth quarter. Zacks forecast Big Lots earnings per share of $3.03.
The company said its forecast reflected “an expectation of gross margin rate approximately flat to last year.” And it cited “transportation capacity constraints,” backlogs caused by inventory restoration and labor shortages related to the coronavirus pandemic.
Big Lots also said customer traffic in December was “softer than planned.” Still, the chain said that same-store sales were up roughly 7.5% in its fourth quarter. E-commerce demand was up around 135%.
Big Lots stock fell 1.3% on Wednesday, finding support at the 50-day line and off intraday lows. BIG stock has a 90 Composite Rating. Its EPS Rating is 93.
Five Below Stock Off Highs
On Tuesday, teen-centered discount retailer Five Below (FIVE) said net sales spiked 21.1% to $722.3 million from Nov. 1 through Jan. 2. Same-store sales over that time rose 10.1%.
The company said it sees net sales of $835 million to $840 million for its fourth quarter. That’s above expectations for $826.04 million. Five Below forecast an 11% gain in same-store sales.
The chain said it expected to earn $2.08 to $2.12 a share during that quarter. That was also above expectations for Five Below earnings per share of $2.05.
Five Below stock rose 0.4% to 192.60 on Wednesday, hitting a fresh high intraday. Shares climbed 1.5% on Tuesday. FIVE stock last month broke out of an ascending base with a 168.07 buy point, but is now extended.
Five Below stock still has a 92 Composite Rating and a 91 EPS Rating.
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