- Target Corp (NYSE:TGT) reported fourth-quarter FY21 sales growth of 9.4% year-on-year, to $30.99 billion, missing the consensus of $31.41 billion.
- Comparable sales grew 8.9% versus 20.5% growth last year. Comparable stores sales increased 8.9%, and digital sales rose 9.2%.
- Adjusted EPS of $3.19 beat the consensus of $2.86.
- The gross margin for the quarter contracted 110 basis points Y/Y to 25.7% due to pressure from increased supply chain costs.
- The operating margin expanded 30 basis points to 6.8%, while operating income for the quarter rose 14.1% Y/Y to $2.1 billion.
- EBITDA increased 13.7% Y/Y to $2.8 billion.
- The company had 1,926 stores as of January 29, 2022, versus 1,897 stores last year.
- Target held $5.9 billion in cash and equivalents as of January 29, 2022. As of Q4 end, the company had $12.3 billion remaining capacity under the repurchase program approved in August 2021.
- Outlook: Target sees FY22 revenue growth of low to mid-single-digit and an operating margin rate of 8% or higher.
- The company expects high-single-digit growth in FY22 adjusted EPS.
- The company expects the Q1 FY22 operating margin rate to be favorable in relation to historical performance but well below its Q1 FY21 rate of 9.8%.
- Target has also updated its long-term financial algorithm, with mid-single-digit growth in total revenue.
- Price Action: TGT shares are trading higher by 10.9% at $221.50 in premarket on the last check Tuesday.
