Target Corporation Reports Third Quarter Earnings

*Comparable sales increased 2.7 percent, on top of 12.7 percent growth last year.
*Comparable sales growth was driven by 1.4 percent traffic growth and a 1.3 percent increase in average ticket.
*Category performance was led by growth in frequency businesses including Beauty, Food and Beverage and Household Essentials, which offset continued softness in discretionary categories.
*The Company saw unit share gains across all five core merchandising categories.
*Third quarter operating margin rate of 3.9 percent improved meaningfully compared with the second quarter results, but fell far short of expectations.

Target Corporation (NYSE: TGT) today announced its third quarter 2022 financial results, which reflected continued sales and traffic growth in an increasingly challenging environment.

The Company reported third quarter GAAP earnings per share (EPS) of $1.54, down 49.3 percent from $3.04 in 2021. Third quarter Adjusted EPS1 of $1.54 decreased 49.1 percent compared with $3.03 in 2021. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS.

“In the third quarter, our business delivered comparable sales growth of 2.7 percent, and we saw unit share gains across all of our core merchandise categories. This performance demonstrates the durability of our business model which continues to serve our guests and drive loyalty despite the challenging economic environment,” said Brian Cornell, chairman and chief executive officer of Target Corporation. “In the latter weeks of the quarter, sales and profit trends softened meaningfully, with guests’ shopping behavior increasingly impacted by inflation, rising interest rates and economic uncertainty. This resulted in a third quarter profit performance well below our expectations.

While we’re ready to deliver exceptional value for our guests this holiday season, supported by the decisive inventory actions we took earlier this year, the rapidly evolving consumer environment means we’re planning the balance of the year more conservatively. We’re also taking new actions to drive efficiencies now and in the future, optimizing our operations to match the scale of our business and drive continued growth. The strides we have made in recent years to build a truly differentiated, guest-centered retail offering, punctuated by a balanced, multi-category portfolio, positions us well to navigate in any environment. Looking ahead, we remain laser-focused on delivering the best of Target to our guests, and continuing to invest in our long-term, profitable growth.”
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