Investing.com -- Target has reported adjusted per-share income in the fourth quarter that topped average analyst estimates, sending shares in the big-box retailer higher in premarket U.S. trading on Tuesday.
The Minneapolis-based company has been facing a slowdown in customer spending on discretionary items during a time of high inflation and elevated interest rates. But it has previously said that this sluggishness in expenditures is showing signs of ebbing.
Chief Executive Officer Brian Cornell noted on Tuesday that sales and traffic trends have displayed "further improvement." Total comparable sales dipped by 4.4% in the three months ended on Feb. 3, but the decrease was less than the 4.56% drop predicted by Wall Street.
Sales, meanwhile, grew by 1.6% to $31.47 billion thanks in large part to an additional trading week in Target's 2023 fiscal year. Analysts had called for sales of $31.35B.
"Throughout the season, guests responded to newness, value, and the inspiration and ease of our in-store and digital shopping experience," Cornell said in a statement on Tuesday.
A drive to contain markdowns and inventory-related costs, as well as lower input expenses, also boosted earnings. Adjusted earnings per share (EPS) jumped by 57.6% versus the year-ago period to $2.98, ahead of forecasts of $2.40.
Target guided for a current-quarter comparable sales dip of 3% to 5%, although Cornell said the firm will continue to position itself for profitable growth this year. Full-year comparable sales growth is expected to be in a range of flat to 2%, while adjusted EPS is seen at $8.60 to $9.60.
In a note to clients, analysts at Citi said that while the outlook implies a "weaker" start to 2024, it also suggests that Target's executives are "going back on offense to drive top line growth" later on in the year.