Episode summary
Target Tempers Expectations After Best Sales Gain in Years | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: Jennifer Bartashus, Mary Ross Gilbert, Drew Reading, Matthew Schettenhelm
Summary
Target delivered a much stronger first quarter than expected, with comparable sales up 5.6%, the biggest increase since the end of 2021, but the guest said management’s outlook was notably cautious. The company lifted annual revenue guidance only modestly, signaling that the current pace is likely to cool after tax refunds and other tailwinds fade. The discussion centered on Target’s turnaround efforts: sharpening assortment in baby, beauty, and health and wellness, improving store availability, and rebuilding the “Tar-jay” sense of discovery.
TJX was presented as the clearer execution story. The guest said the off-price chain benefits from cautious consumers trading down, conservative guidance, and a deep pool of excess merchandise, including luxury goods. TJX raised its sales growth expectations and continues to expand through new stores and international growth, with a long runway still ahead.
Lowe’s was described as stable but constrained by the housing cycle. Comparable sales rose 0.6%, full-year guidance was unchanged, and the guest said the company is leaning on productivity, AI, and pro-customer investments while waiting for housing turnover to recover. The final segment shifted to OpenAI and Elon Musk, where the guest said Musk’s lawsuit is a major win for OpenAI and leaves its for-profit structure intact as it moves closer to a public-market path.
Key takeaways
- Target’s 5.6% comparable sales gain was a turnaround sign, but the guest said guidance implies very low-single-digit growth ahead.
- The guest said Target is leaning on baby, beauty, health and wellness, and better in-stock performance to rebuild traffic and loyalty.
- TJX raised its sales outlook because off-price retail is still benefiting from trade-down demand and abundant merchandise, including luxury goods.
- Lowe’s held full-year guidance unchanged, with the guest pointing to weak housing turnover and cautious DIY spending as the main drag.
- The guest said Elon Musk is a significant underdog on appeal, making OpenAI’s for-profit strategy much less encumbered.
Notable quotes
“Target had a really good first quarter. Much better than most people expected”
“The comp sales for the quarter that ended was pretty eye-opening. Up 5.6%”
“TJX is known for executing seamlessly. So, they also guide conservatively, and you expect them to beat every time”
“0.6% comp on same-store sales. They maintained their full full year guidance calling for for flat to 2% growth”
“Musk losing this case is the big takeaway. I think that's a big win for OpenAI”
How the episode opens
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Listen on demand wherever you get your podcasts or watch us live on YouTube. I'm looking at Target. Target reported earnings strongest sales gain in years, but they're a little cautionary I think in their guide.
Next year the stock's down 6% here today. Although it's up 22% year to date. Jen Bartashus she covers this part of the retail space for Bloomberg Intelligence.
She joins us from the BI offices in Princeton, New Jersey. Jen, talk to us about Target. What did they report?
What's their outlook? Yeah, hi Paul. So Target had a really good first quarter.
Much better than most people expected. And I think that it really is a reflection that some of the tactics they're putting in place as part of their turnaround are taking hold and that consumers are responding. But as you kind of sort of implied in your introduction, they really didn't nudge much in with regards to their their guidance in response to a strong fiscal first quarter.
And so I think people are looking at that as a very conservative outlook for the rest of the year. The comp sales for the quarter that ended was pretty eye-opening. Up 5.6%.
That was the biggest increase since the end of 2021 and also three times the average analyst estimate. Is this more than just easy comparisons? Well, in part Scarlet it's easy comparisons, but we also had other things like the tax refund season.
There were some good tax refunds out there that people were spending. There there were a few of those sort of tailwinds.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- retail earnings
- consumer spending trends
- homebuilding and home improvement
- cost pressures and productivity
- openai legal dispute
Companies and tickers mentioned
- TGT
- TJX
- LOW
- Target
- TJX Companies
- Lowe's Companies
- OpenAI
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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