Tariff refunds double Target profits while Lowe's issues sales warning
Target doubled its profit with 994 million dollars in tariff refunds. Meanwhile, Lowe's lowered expectations following weak spending, and Toll Brothers experienced a decline in deliveries.
Economics & Markets··Evening
Target's refunds?
Target's second-quarter operating income was 2.6 billion dollars. Pre-tax tariff refunds of 994 million dollars lifted earnings per share to 4.11 dollars from 2.05 dollars. Excluding these refunds, the profit increase was 20 per cent. The company's store sales grew 2.7 per cent, while digital sales increased by 8.7 per cent. For the full year, the company forecasts 5 per cent sales growth and targets earnings per share between 9.90 dollars and 10.90 dollars. 3.7 points of the profit margin came directly from these refunds.[1]
Why did Lowe's lower its target?
Home improvement retailer Lowe's saw sales rise to 26.0 billion dollars from 24.0 billion dollars, yet comparable sales grew only 0.2 per cent. The company reported a net profit of 2.4 billion dollars and diluted earnings per share of 4.27 dollars in the quarter ended July 31. The full-year comparable sales expectation was lowered to flat; the previous forecast had anticipated growth between flat and 2 per cent. In addition, the earnings per share target was reduced to 12.25 dollars. The company explained the decision with weak consumer spending.[2]
How did Toll Brothers deliveries change?
Toll Brothers' home sales revenues dropped from 2.88 billion dollars to 2.65 billion dollars, and the number of delivered homes fell to 2,662 from 2,959. The average price of the delivered homes was 996,400 dollars. Conversely, the total value of new signed contracts rose to 2.52 billion dollars from 2.41 billion dollars. The number of contracted homes increased from 2,388 to 2,508. The company closed the quarter with a 6.24 billion dollars backlog covering 5,312 homes. Diluted earnings per share decreased to 2.97 dollars from 3.73 dollars.[3]
