Retail

Target Short Interest Rises by 5.7 Million

Douglas A. McIntyre

Published: August 25, 2016 8:15 am

Last Updated: January 13, 2020 4:17 am

Short interest in Target Corp. (NYSE: TGT) rose by 5.7 million shares in the period that ended August 15. That put the figure at 42.7 million.

Target is among the large U.S. retailers that have stumbled so far this year. Over the past six months, shares are down 8.8%, while the S&P 500 is 11.5% higher.

Earlier this month:

Target Corporation reported a second quarter 2016 comparable sales decrease of 1.1 percent and GAAP earnings per share (EPS) from continuing operations of $1.07, a decrease of 11.6 percent from second quarter 2015. Second quarter adjusted earnings per share from continuing operations (Adjusted EPS), which excludes $161 million of pre-tax early debt retirement losses, were $1.23, an increase of 0.5 percent from second quarter 2015.

Revenue fell 7.2% to $16.2 billion.

Target’s chairman and CEO, Brian Cornell, said:

While we recognize there are opportunities in the business, and are addressing the challenges we are facing in a difficult retail environment, we are pleased that our team delivered second quarter profitability above our expectations. Looking ahead, we remain focused on our enterprise priorities as we continue to see the benefits of investing in Signature Categories, store experience, new flex-format stores and digital capabilities. Although we are planning for a challenging environment in the back half of the year, we believe we have the right strategy to restore traffic and sales growth over time.

And guidance for the next quarter and fiscal year was light:

While Target has plans in place to strengthen results over time, based on the current retail environment the Company believes it is prudent to lower its expectations for comparable sales in the second half of the year. In both the third and fourth quarters of 2016, Target now expects comparable sales growth in the range of (2.0) percent to flat.

In third quarter 2016, Target expects both GAAP EPS from continuing operations and Adjusted EPS of $0.75 to $0.95.

For full-year 2016, Target now expects GAAP EPS from continuing operations of $4.36 to $4.76, compared with prior guidance of $4.76 to $4.96. The Company expects full-year 2016 Adjusted EPS of $4.80 to $5.20, compared with prior guidance of $5.20 to $5.40.

Based on its share price and short interest, investors are nervous.