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Target Corporation Posts Q4 and FY2022 Results

02/28/2023

On February 28th Target Corporation (TGT) posted results for Q4 and FY2022 ending January 29th.  For the quarter, the Company earned $876 million on revenue of $31,395 million with a diluted EPS of $1.89.  For the corresponding Q4 of FY2021, Target earned $1,544 million on sales of $30,996 million with a diluted EPS of $3.21.  Revenue was 1.3 percent higher but net earnings decreased by 43.3 percent.

 

For Fiscal 2022, the company posted net earnings of $2,780 million on revenue of $109,120 million with a diluted EPS of $5.98. Comparable figures for FY2021 were net earnings of $6,946 million on revenue of $106,105 million with a diluted EPS of $14.10. Revenue for the year increased by 2.8 percent but earnings fell by 60.0 percent. 

 

In commenting on results Brian Cornell Chairman and CEO stated “We're pleased that our business delivered comparable sales growth in the fourth quarter, in what continues to be a very challenging environment. Strength in Food & Beverage, Beauty and Household Essentials offset ongoing softness in discretionary categories. This performance highlights the benefit of our multi-category merchandise assortment, which drives relevance with our guests in any environment, and is a key reason we grew traffic every quarter last year," Cornell continued, "Looking ahead, we're focused on executing our long-term strategy, including continued differentiation through affordability, assortment, ease and convenience. At the same time, we're planning our business cautiously in the near term to ensure we remain agile and responsive to the current operating environment. We're pleased that we entered the year in a very healthy inventory position, reflecting our conservative approach in discretionary categories and our commitment to reliability in our frequency businesses. As we plan for the year ahead, we will continue to make robust capital investments and pursue efficiency opportunities in support of our long-term growth”.

 

The Company release included guidance, “For fiscal 2023, the Company expects low-to mid-single digit revenue growth or a decline, operating income will increase by $1 billion and adjusted EPS will range from $7.75 to $8.75”.

 

Comparable same-store sales increased by 0.7 percent compared to the Q4 FY 2021value of 8.9 percent. Same-day services (Shipt and pick-up) represented 10 percent of sales. Stores generated 79.2 percent of sales with 20.8 percent originated digitally.

 

At the end of FY2022, Target Corporation operated 1,948 stores with a total retail area of 244,584 square feet. The company invested $5,528 million in property and equipment during fiscal 2022.

 

On January 28th Target posted total assets of $53,335 million, down 0.8 percent from the end of FY2021. Long-term debt and lease obligations attained $20,407 million. Target Corporation had an intraday market capitalization of $76,280 million on February 28th. The Company has traded over the past fifty-two weeks in a range of $137.16 to $254.87 with a 50-day moving average of $161.47.  TGT trades with a forward P/E of 16.8. On February 27th the share closed at $166.32 but after the morning release on February 28th TGT closed at $168.50.

 

Twelve-month trailing operating margin was 4.5 percent and profit margin 3.2 percent.  The Company generated a return on assets of 5.6 percent and 27.8 percent on equity.