Target Corp. (TGT – Free Report) is scheduled to release third-quarter fiscal 2017 results on Nov 15. Well, the obvious question that comes to mind is will this operator of general merchandise stores be able to deliver positive earnings surprise in the quarter to be reported.

In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 15.1%.

The Zacks Consensus Estimate for the third quarter is pegged at 85 cents down from $1.04 reported in the year-ago period. Analysts polled by Zacks expect revenues of $16,521 million compared with $16,441 million in the prior-year quarter. Target envisions third-quarter earnings in the band of 75-95 cents a share.

Factors at Play

Target’s initiatives such as the development of omni-channel capacities, diversification and localization of assortments along with emphasis on flexible format stores are encouraging. Additionally, the company intends to deploy resources to significantly develop online platform as well as store facilities to make shopping more convenient for customers.

In a bid to stimulate its digital sales this holiday season, Target is also strengthening its relationship with Google by allowing customers nationwide to shop through Google Express including voice-activated shopping. We observed that comparable digital channel sales surged 32% during the second quarter of fiscal 2017 and added 1.1 percentage points to comparable sales.

Meanwhile, Target plans to expand merchandise assortments with special emphasis on Style, Baby, Kids and Wellness categories that are performing well. Also, the company has adopted a cost reduction strategy including rationalization of supply chain, technology and process improvements.

The company also rolled out Target Restock program that allows customers to restock their shipping box with essential items online and get them delivered at door steps by the next business day for a nominal charge. These endeavors are of vital importance with regard to sales and margins, which might be affected by adverse retail conditions like increasing online penetration and aggressive pricing.

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