Target Announces Mixed Fiscal First-Quarter Results
May 18, 2022 By MarketDepth
Target (NYSE: TGT) announced mixed fiscal first-quarter results on Wednesday as it dealt with increasing freight costs, wider markdowns and declining sales of discretionary items. Shares fell approximately 24% during premarket trading, upon the news.
Earnings Lower Than Expected
The retailer reported earnings of USD2.19 per share, compared to the expected USD3.07 a share. Meanwhile, revenue amounted to USD25.17 Billion, higher than analysts anticipated USD24.49 Billion.
“Our first-quarter results mark Target’s 20th-consecutive quarter of sales growth, with comp sales growing more than 3 percent on top of a 23 percent increase one year ago. Guests continue to depend on Target for our broad and affordable product assortment, as reflected in Q1 guest traffic growth of nearly 4 percent. Throughout the quarter, we faced unexpectedly high costs, driven by a number of factors, resulting in profitability that came in well below our expectations, and well below where we expect to operate over time. Despite these near-term challenges, our team remains passionately dedicated to our guests and serving their needs, giving us continued confidence in our long-term financial algorithm, which anticipates mid-single digit revenue growth, and an operating margin rate of 8 percent or higher over time.”Brian Cornell, chairman and chief executive officer of Target Corporation
Nevertheless, sales rose compared to the previous year. Comparable sales grew 3.3% within the first quarter, higher than Wall Streets forecasted 0.8%. Furthermore, the company’s website traffic rose 3.9%.