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Financial, Retail

Target Corporation Reports Third Quarter Earnings

Target announces Q3 results and reports that declines in discretionary categories were partially offset by continued growth in frequency categories, most notably in Beauty.

11/15/2023
target info graphic
Target reports that comparable sales dip while earnings per share increase.
 
MINNEAPOLIS -- Target Corporation (NYSE: TGT) today announced its third quarter 2023 financial results, which reflected stronger-than-expected profit performance on sales consistent with expectations.

Brian Cornell, chair and chief executive of Target Corporation, said "In the third quarter, our team continued to successfully navigate our business through a very challenging external environment. While third quarter sales were consistent with our expectations, earnings per share came in far ahead of our forecast. This profit performance benefited from our team's commitment to efficiency and disciplined inventory management, and I'd like to thank them for their tireless efforts. Looking ahead, we're continuing to make investments throughout our business -- in our assortment, our team and the services we offer -- to provide the newness, affordability and convenience our guests want during the holiday season and beyond."

Q3 HIGHLIGHTS:

-- Reported third quarter GAAP and Adjusted earnings per share1 (EPS) of $2.10, up 36.3 percent from $1.54 in 2022.

-- Third quarter operating income margin rate of 5.2 percent was 1.3 percentage points higher than last year, driven by a higher gross margin rate.

-- Third quarter GAAP and Adjusted EPS1 of $2.10 was 36 percent higher than a year ago and above the high end of the Company's guidance range, reflecting disciplined inventory and expense management.

-- Through the first three quarters of this year, Target has generated more than $5.3 billion of operating cash flow, compared with approximately $550 million in 2022.

-- Third quarter comparable sales declined 4.9 percent, in line with expectations.

-- Declines in discretionary categories were partially offset by continued growth in frequency categories, most notably in Beauty.

-- Same-day services grew more than 8 percent, led by more than 12 percent growth in Drive-Up.

-- Inventory at the end of Q3 was 14 percent lower than last year, reflecting a 19 percent reduction in discretionary category inventory.

-- To deliver newness and value for guests this holiday season, Target will offer more than 10,000 new items for the holidays, with thousands of must-have gifts under $25, and thousands of exclusive-to-Target items across many categories.

Read the full release.
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