Target's Very Bad Earnings Report Isn't Bad News for Investors
On Wednesday, Target (NYSE: TGT) reported earnings results that were even worse than the company had projected when it dramatically slashed its forecast in June. Adjusted earnings per share (EPS) plummeted 89% year over year as the retail giant rolled out big clearance discounts to address a buildup of unwanted merchandise.
However, long-term investors shouldn't worry about Target's bad earnings report. While the second quarter was painful, Target has now addressed much of its aging inventory and is well positioned for a return to earnings growth in the quarters and years ahead.
Three months ago, Target reported a 5.3% operating margin for the first quarter. That translated to adjusted EPS of $2.19. At the time, management said that the company's Q2 operating margin might be similar, but it acknowledged a high degree of uncertainty.
Source Fool.com
