Target recently reported strong results and guidance while providing encouraging commentary on its conference call. Action Alerts PLUS Portfolio Manager Jim Cramer and Director of Research Jack Mohr believe the company assuaged investor concerns around its comparable sales (comps) momentum, digital growth trajectory, inventory turnaround, and ability to deliver strong performance in the face of a hyper-competitive promotional backdrop and reported weakness across the company’s peer group (which, on average, saw comps decline 2% in the fourth quarter and EPS drop 15%.) While investors may get picky around lower gross margins (the company made the decision to invest in free shipping to drive e- commerce re-acceleration), we believe the quarter demonstrated the company’s distinct value proposition and ability to outperform its peers amid an incredibly difficult competitive backdrop.
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