What Target's Earnings Mean for Mutual Fund Investors (TGT)

Before Wednesday’s opening bell, discount retailer Target (TGT) released its fourth quarter financial results. Here’s what the results mean for mutual fund investors.

Inside TGT’s Results

Earnings

Target reported a net loss of $2.64 billion, or $4.10 per share, compared to net income of $520 million, or 81 cents per share, last year. The net loss was due to the company’s exit from Canada. Excluding its withdrawal from Canada, Target’s EPS was $1.50, compared to $1.31 last year. Analysts expected to see adjusted EPS of $1.46.

Revenue
Sales rose 4.1% to $21.75 million from $20.89 billion last year. Analysts expected to see revenue of $21.63 billion. Comparable store sales rose 3.8% during the quarter.

Outlook
Looking ahead to the first quarter, the company expects to see EPS between 95 cents and $1.05. The company said that it will provide FY2015 guidance on March 3.

Target Embraces Digital Trends

As shopping trends continue to head towards increased online buying, Target is embracing the trend by improving its online shopping experience for customers. The retailer has already cut its minimum purchase for free shipping amount from $50 to $25 – attempting to capture additional sales. In addition, Target is now revamping its apps to improve engagement with customers.

During the fourth quarter, Target’s online sales rose 30%. Currently, online sales account for 2.5%-3% of the company’s total sales.

Mutual Funds to Watch

Investors interested in TGT may consider a mutual fund as an alternative to owning the individual stock. The funds below currently hold the largest stakes in TGT.

The Bottom Line

The funds listed above allow investors to gain exposure to TGT while remaining diversified. Investors interested in TGT may also be interested in Wal-Mart (WMT) or Costco (COST) .