Target Corporation (TGT) announced its fourth quarter and full-year earnings report on Tuesday, March 4. Despite reporting better-than-expected revenue and earnings, the retailer’s shares dropped almost 5% following the earnings release.

Target reported quarterly revenue of $30.92 billion. This was down 3% from revenue of $31.92 billion in the same quarter last year and above analysts’ expectations of $30.82 billion. Full-year revenue came in at $106.57 billion, down 1% from $107.41 billion the previous year.

“Our team grew traffic and delivered better-than-expected sales and profitability in our biggest quarter of the year,” said Target CEO, Brian Cornell. “Consumers continue to be drawn to the everyday discovery and delight that only Target can deliver, and we are committed to leveraging our strategy, scale and unique position in retail to build on this distinct competitive advantage and drive long-term profitable growth.”

The company reported net income of $1.10 billion for the quarter or $2.41 per share. This is a decrease from net income of $1.38 billion or $2.98 per share in the same quarter last year. For the full year, Target reported net income of $4.09 billion.

Target’s total comparable sales increased 1.5% in the quarter, partially attributed to an increase in digital comparable sales of 8.7%. During the fiscal year, Target opened 22 net new stores, bringing its total to 1,978. Target’s gross margin rate declined to 26.2% compared to 26.6% in the fourth quarter of last year. The decrease was attributed to higher digital fulfillment and supply chain costs as well as higher promotional and clearance markdown rates. Target expects to earn between $8.80 to $9.80 per adjusted share in fiscal year 2025.

Target Corporation (TGT) shares ended the week at $115.08, down 8% for the week.

AutoZone Announces Earnings

AutoZone, Inc. (AZO) released its second quarter earnings report on Tuesday, March 4. The auto parts company’s shares fell by 1% after reporting an increase in sales but falling short of analysts’ revenue and earnings estimates.

The company reported net sales of $3.95 billion during the quarter, falling short of analysts’ expectations of $3.98 billion. This was up over 2% from $3.86 billion in sales during the same quarter last year.

“I want to thank our AutoZoners for delivering solid results this quarter,” said AutoZone CEO, Phil Daniele. “We are excited about our momentum heading into the back half of the fiscal year and we are well prepared for our spring and summer selling season. As we continue to invest in our business, we remain committed to our disciplined approach of increasing earnings and cash flow, all while delivering strong shareholder value.”

AutoZone reported net income of $487.92 million for the quarter or $28.29 per adjusted share. This was down from $515.03 million or $28.89 per adjusted share in the same quarter last year.

The Memphis, Tennessee-based company saw a 1.9% increase in its domestic same store sales for the quarter and an 8.2% decrease for international same store sales. During the second quarter, AutoZone opened 45 net new stores, including 28 stores in the U.S., 13 stores in Mexico and four in Brazil. Currently, the company has a combined total of 7,432 stores globally. AutoZone returned $329.4 million to shareholders through share repurchases in the second quarter and has $1.3 billion remaining authorized under its share repurchase program.

AutoZone, Inc. (AZO) shares ended the week at $3,614.97, up 3% for the week.

Abercrombie & Fitch Announces Results

Abercrombie & Fitch Co. (ANF) announced its fourth quarter and full-year earnings report on Wednesday, March 5. The clothing company’s mixed report met analysts’ expectations but projected weak future guidance which resulted in its shares dropping 15% following the release.

Revenue for Abercrombie’s fourth quarter reached $1.58 billion. This is up 9% from $1.45 billion in revenue at this time last year and exceeded consensus estimates of $1.57 billion in revenue for the quarter. Full-year sales came in at $4.95 billion, a 16% increase from $4.28 billion in fiscal 2023.

“In fiscal 2024, we once again delivered on our commitments to our global customers and shareholders,” said Abercrombie’s CEO, Fran Horowitz. “We enter fiscal 2025 with highly relevant brands, an agile playbook, and a motivated global team driven by a culture of innovation and growth. Our expectation in 2025 is to build on the past two years of outstanding results and again deliver profitable growth while strengthening our brands and operating model.”

Abercrombie reported net income of $187.23 million or $3.57 per diluted share. This is an increase from net income of $158.45 million or $2.97 per adjusted share in the same quarter last year. For the full year, the company reported net income of $566.22 million or $10.69 per diluted share. This was up from $328.12 million or $6.22 per adjusted share in fiscal 2023.

The Ohio-based company, which operates 789 Abercrombie and Hollister clothing stores, saw comparable sales growth of 14% year-over-year. Revenue in Abercrombie’s Americas segment reported an 11% increase to $1.32 billion for the quarter, and its Europe, Middle East and Africa segment returned an increase of 2% to $224.47 million. Sales in the Asia-Pacific region decreased 4% to $40.73 million. The company issued its full year 2025 guidance and expects sales growth to increase 3% to 5% and earnings per diluted share of $10.40 to $11.40.

Abercrombie & Fitch Co. (ANF) shares ended the week at $86.03, down 17% for the week.

The Dow started the week of 3/3 at 43,900 and closed at 42,802 on 3/7. The S&P 500 started the week at 5,968 and closed at 5,770. The NASDAQ started the week at 18,923 and closed at 18,196.

Treasury yields fluctuated throughout the week as the investors assessed the impact of tariffs enacted by the U.S. on imports from Canada, Mexico and China which were partially put on hold the following day. Yields continued to vary at the end of the week as the February jobs reports suggested an uncertain labor market.

On Wednesday, the Institute for Supply Management (ISM) released its purchasing managers’ index (PMI) for February indicating growth in the service industry for the eighth consecutive month. The PMI measures the change in economic activity in the services sector and is used as an indicator of U.S. economic activity. The PMI for February was 53.5%, up from a PMI of 52.8% in January and above economists’ estimates of 52.9%.

“February was the third month in a row with all four subindexes that directly factor into the Services PMI – Business Activity, New Orders, Employment and Supplier Deliveries – in expansion territory, the first time this has happened since May 2022,” said Chair of the ISM Services Business Survey Committee, Steve Miller. “Slightly slower growth in the Business Activity Index was more than offset by growth in the other three subindexes. Anxiety continues, however, over the potential impact of tariffs. Some respondents indicated that federal spending cuts are having negative impacts on their business forecasts.”

The benchmark 10-year Treasury note yield opened the week of March 3 at 4.22% and traded as low as 4.11% on Tuesday. The 30-year Treasury bond opened the week at 4.51% and traded as low as 4.42% on Tuesday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 21,000 to 221,000 for the week ending March 1. This was less than the 236,000 claims analysts expected. Continuing claims increased by 42,000 to 1.90 million. Nonfarm jobs, seasonally adjusted, increased 151,000 for February, coming in lower than the 170,000 economists expected.

“There were fears that today’s jobs report would reveal some deeply unsettling news around the health of the labor market,” said chief global strategist at Principal Asset Management, Seema Shah. “Yet, while the worst fears were not met, the report does confirm that the labor market is cooling.”

The 10-year Treasury note yield finished the week of March 3 at 4.30% while the 30-year Treasury note yield finished the week at 4.60%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, March 6. The survey showed another decline in the 30-year fixed mortgage rates.

This week, the 30-year fixed mortgage rate averaged 6.63%, down from last week’s average of 6.76%. Last year at this time, the 30-year fixed mortgage rate averaged 6.88%.

The 15-year fixed mortgage rate averaged 5.79% this week, down from last week’s average of 5.94%. During the same week last year, the 15-year fixed mortgage rate averaged 6.22%.

"As the spring homebuying season gets underway, the 30-year fixed-rate mortgage saw the largest weekly decline since mid-September,” said Freddie Mac’s Chief Economist, Sam Khater. "The decline in rates increases prospective homebuyers’ purchasing power and should provide a strong incentive to make a move. Additionally, this decline in rates is already providing some existing homeowners the opportunity to refinance. In fact, the refinance share of market mortgage applications released this week reached nearly 44%, the highest since mid-December.”

Based on published national averages, the savings rate was 0.41% as of 2/18. The one-year CD averaged 1.80%.

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