- Target Corp (NYSE:TGT) reported first-quarter FY22 sales growth of 4% year-on-year to $25.17 billion, beating the consensus of $24.37 billion.
- Comparable sales grew 3.3%. Comparable store sales increased 3.4%, and comparable digital sales rose 3.2%.
- Sales by stores constituted 81.8% of total sales, while digital channel sales represented 18.2%.
- Gross margin for the quarter contracted by 430 basis points to 25.7%.
- Selling, general and administrative expenses rose 5.6% to $4.8 billion.
- The operating margin contracted from 9.8% to 5.3%, and operating income for the quarter fell 43.3% to $1.3 billion.
- Inventory increased 8.5% to $15.1 billion at April-end compared to January-end.
- The company held $1.1 billion in cash and equivalents as of April 30, 2022.
- EBITDA for the quarter decreased 39.7% to $2 billion.
- Adjusted EPS of $2.19 missed the consensus of $3.07.
- "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," said chairman and CEO Brian Cornell.
- Outlook: Target continues to expect FY22 revenue growth of low- to mid-single-digit.
- The company expects an FY22 operating income margin rate of around 6%.
- For Q2, TGT expects an operating income margin of around 5.3%.
- Price Action: TGT shares are trading lower by 24.1% at $163.29 in premarket on the last check Wednesday.
- Photo Via Wikimedia Commons
