February 28, 2023 – Target Corporation (NYSE: TGT) today announced its fourth-quarter and full-year 2022 results. The Company reported fourth-quarter GAAP earnings per share (EPS) of $1.89, compared with $3.21 in 2021, and $5.98 for full-year 2022, compared with $14.10 in 2021. Adjusted EPS1 was $1.89 for the fourth quarter, compared with $3.19 in 2021, and $6.02 for the full-year, compared with $13.56 in 2021. Full-year 2021 GAAP EPS included a $335 million pretax gain on the sale of Dermstore, which was excluded from Adjusted EPS.
Target Corporation (NYSE: TGT) reported fiscal Q4 adjusted earnings Tuesday of $1.89 per share, Analysts polled by Capital IQ forecast $1.40.
Revenue for the quarter ended Jan. 28 was $31.40 billion, Analysts surveyed by Capital IQ projected $30.73 billion.
The retailer’s fiscal Q4 comparable sales grew 0.7%. Analysts polled by Capital IQ expected a decrease of 1.5%.
Target said it expects fiscal Q1 adjusted EPS of $1.50 to $1.90 and comparable sales in a wide range from a low-single digit decline to a low-single digit increase. Analysts surveyed by Capital IQ are looking for adjusted EPS of $2.16 and a comparable sales increase of 0.2%.
For fiscal 2023, the company said it expects adjusted EPS of $7.75 to $8.75 and comparable sales in a wide range from a low-single digit decline to a low-single digit increase. The consensus estimates are for adjusted EPS of $9.28 and comparable sales growth of 1.2%.
The Company’s total comparable sales grew 0.7 percent in the fourth quarter, reflecting comparable stores sales growth of 1.9 percent and a comparable digital sales decline of (3.6) percent. Total revenue of $31.4 billion grew 1.3 percent in the fourth quarter compared with last year, driven by sales growth of 1.2 percent and an 8.4 percent increase in other revenue. Operating income was $1.2 billion in fourth quarter 2022, down 44.7 percent from $2.1 billion in 2021.
Full-year sales increased 2.8 percent to $107.6 billion from $104.6 billion last year, reflecting a 2.2 percent increase in comparable sales combined with sales from non-mature stores. Full-year total revenue of $109.1 billion grew 2.9 percent compared with 2021, reflecting sales growth of 2.8 percent and a 9.8 percent increase in other revenue.
Fourth quarter operating income margin rate was 3.7 percent in 2022 compared with 6.8 percent in 2021. Fourth quarter gross margin rate was 22.7 percent, compared with 25.7 percent in 2021, reflecting pressure from higher clearance and promotional markdown rates, higher net merchandise costs, and higher inventory shrink, partially offset by favorable category mix.
Full-year operating income of $3.8 billion in 2022 was down 57.0 percent from $8.9 billion last year. Full-year gross margin rate was 23.6 percent, compared with 28.3 percent in 2021, reflecting pressure from higher clearance and promotional markdown rates, higher net merchandise and freight costs, higher supply chain costs reflecting increased compensation and headcount in the Company’s distribution centers, and higher inventory shrink.
The Company paid dividends of $497 million in the fourth quarter, compared with $432 million last year, reflecting a 20.0 percent increase in the dividend per share, partially offset by a decline in average share count.
The Company did not repurchase any shares in fourth quarter 2022. As of the end of the fourth quarter, the Company had approximately $9.7 billion of remaining capacity under the repurchase program approved by Target’s Board of Directors in August 2021.
Business Outlook
For first quarter 2023, the Company expects comparable sales in a wide range, from a low-single digit decline to a low-single digit increase, and an operating income margin rate of 4 to 5 percent. First quarter GAAP EPS and adjusted EPS are both expected to range from $1.50 to $1.90.
