Target Corp. projected first-quarter profit that was higher than analysts' estimates as the second- largest U.S. discount retailer begins opening stores in Canada this year.
Earnings per share will be $1.22 to $1.32, the Minneapolis- based company said today in a statement. Analysts projected $1.03, the average of estimates compiled by Bloomberg.
Chief Executive Officer Gregg Steinhafel is working to build sales growth by adding fresh produce and offering exclusive merchandise as the retailer expands outside the U.S. this year for the first time by opening stores in Canada.
Target rose 1.6 percent to $65.05 at 7:39 a.m. in New York. The shares gained 16 percent in the past 12 months through yesterday compared with an increase of 9.5 percent for the Standard & Poor's 500 Index.
Eoin Treacy's view
In reviewing the luxury goods sector on Monday and the UK's apparel sector yesterday,
I also clicked through the US apparel section of my Favourites. While this time
last year a high degree of commonality was evident, this is no longer the case.
There has been a marked loss of uptrend consistency for approximately half of
the sector which suggests that shares are being assessed more on their individual
merits than as a cohesive group.
Target is an S&P500 Dividend Aristocrat and yields 2.25%. The share posted an upside weekly key reversal from the region of the upper side of the underlying trading range at the beginning of January and a sustained move below $60 would be required to question medium-term scope for additional upside.
VF Corp is also an S&P500 Dividend Aristocrat and yields 2.2%. The pace of the share's medium-term uptrend has moderated over the last 18 months but a sustained move below $140 would be required to break the progression of higher reaction lows and question medium-term scope for continued higher to lateral ranging.
Gap, American Eagle Outfitters and Abercrombie & Fitch have pulled back to test the region of their respective 200-day MAs and will need to continue to hold above them if the benefit of the doubt is to be given to the upside. Urban Outfitters broke out to new all-time highs in December and has pulled back to test the $40 area as it reverts towards the mean. A sustained move below $35 would be required to question medium-term upside potential. Carters appears to have also entered a process of mean reversion.
Among discount apparel retailers Ross Stores hit a medium-term peak following an impressive advance in August and pulled back sharply. It encountered resistance in the region of the 200-day MA last week and a sustained move above $62 would be required to question supply dominance. TJX lost momentum from August and continues to pull back from its retest of the peak near $47. It will need to continue to hold above the 200-day MA, currently near $42.50, if the benefit of the doubt it to be given to the upside.
Elsewhere in the apparel sector more generally Limited Brands, Under Armour, Children's Place Retail Stores, Superior Uniform Group, Deckers Outdoor and Ascena have encountered resistance in the region of their respective 200-day MAs and will need to sustain moves above them to question medium-term supply dominance.
Ann and Chico's Fas have both dropped below their respective 200-day MAs and will need to rally back above them and break their progressions of lower rally highs to suggest a return to demand dominance beyond the short term.