Target Corporation Reports First Quarter Earnings

*Comparable sales grew 3.3 percent, on top of 22.9 percent growth last year.
**Comparable sales growth reflected traffic growth of 3.9 percent.
**Store comparable sales increased 3.4 percent, on top of 18.0 percent growth last year.
**Digital comparable sales grew 3.2 percent, following growth of 50.2 percent last year.
**Same-day services (Order Pickup, Drive Up and Shipt) grew 8 percent this year, led by Drive Up, which grew in the mid-teens on top of more than 120 percent last year.
**More than 95 percent of Target’s first quarter sales were fulfilled by its stores.
*Sales growth was led by frequently-purchased categories, including Food & Beverage, Beauty, and Household Essentials.
*Operating margin rate of 5.3 percent was well below expectations, driven primarily by gross margin pressure reflecting actions to reduce excess inventory as well as higher freight and transportation costs.

Target Corporation (NYSE: TGT) today announced its first quarter 2022 financial results, which reflected continued topline growth on top of unprecedented increases over the last two years. The Company reported first quarter GAAP earnings per share (EPS) of $2.16, down 48.2 percent from $4.17 in 2021. First quarter Adjusted EPS1 of $2.19 decreased 40.7 percent compared with $3.69 in 2021. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS.

“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,” said Brian Cornell, chairman and chief executive officer of Target Corporation. “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.”
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