It could have been worse, and it's not like Wall Street was expecting much anyway.

In a nutshell, that's Target's (TGT) third quarter earnings on Wednesday morning.

After almost two years of brutal results at the hands of execution missteps, rising retail theft, and increasingly cautious consumer sentiments, Target clobbered lowered analyst estimates for sales, margins, and earnings. Its stock soared 17% after the report.

On a call with reporters, Target chairman and CEO Brian Cornell pointed to a "resilient" consumer managing to endure numerous financial headwinds from student loan repayments to nagging inflation.

But the caution on the call — and in Target's holiday quarter EPS guidance — was palpable.

"In our research, themes like uncertainty, caution, and management of budgets are top of mind," said Cornell. "Consumers are still bringing up pressures like higher interest rates, increased credit card debt, and reduced savings rates have left them with less discretionary income, forcing them to make trade-offs."

Read more: 6 ways to save money on your Black Friday shopping list

Added Cornell, "For example, we see more consumers delaying purchases until the last moment, such as guests who previously bought sweatshirts or denim in August or September, but are now waiting until the weather turns cold."

The earnings rundown

• Net sales: -4.3% year over year to $25 billion, vs. estimates for $24.9 billion

• Gross profit margin: 27.4% vs. 24.7% a year ago, vs. estimates for 26.6%

• Diluted EPS: +36% year over year to $2.10, vs. estimates for $1.47 (guidance: $1.20 to $1.60)

• Comparable sales: -4.9% year over year (last year it rose 2.7%):

  • Digital comparable sales: -6%

  • Store comparable sales: -4.6%

• Inventory fell 14% from the prior year, led by a 19% reduction in the stock of discretionary categories like apparel and home goods.

• The company once again didn't repurchase any of its stock in the quarter, despite having $9.7 billion left on a prior buyback authorization.

• Both the number of transactions and average check size declined in the quarter.

• Fourth quarter earnings per share are seen in a range of $1.90 to $2.60, vs. estimates for $2.23.

Macro snapshot: Consumers battle student loan repayments

Besides drastically higher interest rates and sticky inflation in food prices, consumers were dealt another blow in October — the return of student loan payments.

More than a month in, the new outflow of dollars appears to be weighing on the spending decisions of shoppers.

About 40% of people with student loans expect to cut spending, according to a survey of 1,500 consumers conducted by Wedbush analyst Tom Nikic. The average balance owed by this cohort ranges from $0 to $50,000, per Wedbush.

Read more: Tips and tricks for quickly paying off student loans

The categories that were most often cited as areas for spending pullbacks were restaurants, apparel, and electronics.

Some of the most at-risk retailers from any spending slowdown are discretionary names such as Williams-Sonoma (WSM), Wayfair (W), and Best Buy (BBY), Nikic said.

Meantime, a new survey out of Morgan Stanley found that among federal student loan holders, only 35% plan to spend more on holiday shopping, relative to 43% last year.

"It's not just one [economic] factor. [Consumers] have been feeling higher prices in food and beverage now for several years. I have talked about the fact on average food and beverages [prices] are up 25%. And while we've seen inflation moderate, those price increases have been very sticky. Interest rates are also going up, there is the pressure of student loans, and credit card balances have increased. So I think that the American consumer is managing all of these components. But we continue to see a very resilient shopper and they're managing their budgets," Cornell added on the call with reporters.

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected].

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