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Target Corporation Posts Q3 FY2024 Results

11/20/2024

On November 20th Target Corporation (TGT) the Nation’s 6th-ranked retailer, posted results for Q3 FY 2024 ending November 2nd. Target fell short of consensus estimates for both revenue ($25,900 million) and earnings ($2.30).  For the quarter, the Company earned $854 million on sales of $25,228 million with a diluted EPS of $1.86. For the corresponding Q3 FY 2023 ending October 28th, Target earned $951 million on sales of $25,004 million with a diluted EPS of $2.10. Sales were higher by 0.9 percent and net earnings were 12.1 percent below Q3 FY 2023. Gross margin declined from 27.4 percent in Q3 FY 2023 to 27.2 percent for the most recent quarter. Operating margin fell from 5.3 percent to 4.6 percent.

 

For Q3 FY 2024, comparable same-store sales increased by 0.3 percent compared to a negative 4.9percent in Q3 FY 2023. This was due to a rise of 2.4 percent in transactions (‘traffic’) offset by a 2.0 percent decline in the value of each transaction (‘ticket’). Digital sales were up 10.8 percent during Q3 FY 2024 attributed to Target Circle with curbside and in-store pickup. The Company benefitted from the Target Circle-360 free loyalty benefits program supplanting the previous paid membership alternative with an increase in membership penetration of 17.7 percent.

 

In commenting on results Brian Cornell Chairman and CEO stated, "Looking ahead, our team is energized and ready to deliver the unique combination of newness and value that holiday shoppers can only find at Target, and we remain confident in the underlying strength and fundamentals of our business, and our ability to deliver on our longer-term financial goals."

 

The Company lowered guidance for FY 2024. Target expects flat same-store sales growth and an adjusted EPS ranging from $8.30 to $8.90 (was $9.00 to $9.70)

 

On August 3rd Target posted total assets of $58,351 million, up 3.8 percent from October 28th  2023. Long-term debt and lease obligations attained $19,831 million. Target Corporation had an intraday market capitalization of $71,870 million on November 20th. The Company has traded over the past fifty-two weeks in a range of $120.94 to $181.86 with a 50-day moving average of $152.04.  TGT trades with a forward P/E of 15.0. On November 19th pre-release the share closed at $156.90 but after the morning release opened at $127.81 on November 20th down 18.6 percent

 

Twelve-month trailing operating margin was 6.6 percent and profit margin 4.2 percent.  The Company generated a return on assets of 7.2 percent and 34.0 percent on equity.

 

At the end of Q3 FY 2024, Target Corporation operated 1,978 stores with a total retail area of 248,000 square feet excluding offices and DCs. The company invested $1,960 million in property and equipment during Q3 FY 2024.