However, the company’s operating income for FY22 dropped by 57 per cent to $3.8 billion, and the gross margin rate also fell from 28.3 per cent in FY21 to 23.6 per cent, reflecting pressure from higher clearance and promotional markdown rates.
American big box department store chain Target Corporation’s sales increased by 2.8 per cent to $107.6 billion in fiscal 2022 (FY22), compared to $104.6 billion in the previous fiscal. The company’s total revenue in FY22 grew by 2.9 per cent to $109.1 billion, mainly due to a 2.8 per cent increase in sales and a 9.8 per cent rise in other revenue.
In the fourth quarter (Q4) of FY22, Target’s total comparable sales rose by 0.7 per cent year-on-year (YoY), with a 1.9 per cent YoY increase in comparable store sales and a 3.6 per cent YoY decline in comparable digital sales. Total revenue for the quarter was $31.4 billion, a 1.3 per cent increase from the same period in the previous year. However, the operating income in Q4 FY22 dropped by 44.7 per cent from $2.1 billion in Q4 FY21 to $1.2 billion.
In Q4 FY22, gross margin rate was 22.7 per cent, compared with 25.7 per cent in FY21.
Target’s same-day services, which represent over 10 per cent of total sales, saw a 4.3 per cent YoY increase in Q4.
For FY23, Target expects comparable sales to range from a low-single digit decline to a low-single digit increase. The operating income is projected to grow by more than $1 billion, and the GAAP EPS and adjusted EPS are both expected to range from $7.75 to $8.75. The company also expects its operating income margin rate to reach 6 per cent as early as FY24, depending on the speed of recovery for the economy and consumer demand.
The company in Q1 FY23 expects comparable sales in a wide range, from a low-single digit decline to a low-single digit increase, with an operating income margin rate of 4 per cent to 5 per cent. The GAAP EPS and adjusted EPS are expected to range from $1.50 to $1.90.
Fibre2Fashion News Desk (DP)