On March 1st Target Corporation (TGT) posted results for Q1 of FY2022 ending April 30th. For the quarter, the company earned $1,009 million on revenue of $25,170 million with a diluted EPS of $2.16.  For the corresponding Q1 of FY2021, Target earned $2,097 million on revenue of $24,197 million with a diluted EPS of $4.17.  Revenue was 4.0 percent higher but net earnings declined by 51.9 percent. Gross margin for Q1 FY2022 declined to 26.5 percent compared to 31.0 percent in Q1 FY2021 attributed to higher cost of goods sold in an inflationary environment. Concurrently operating margin fell from 9.8 percent in Q1 FY2021 to 5.3 percent for the most recent quarter associated with increased freight and transport, wages and utilities.

In commenting on results Brian Cornell Chairman and CEO stated “Our first-quarter results mark Target's 20th-consecutive quarter of sales growth, with comp sales growing more than three percent on top of a 23 percent increase one year ago," He added "Guests continue to depend on Target for our broad and affordable product assortment, as reflected in Q1 guest traffic growth of nearly four percent”.

In belatedly addressing the bottom-line miss Cornell stated, “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. Despite these near-term challenges, our team remains passionately dedicated to our guests and serving their needs, giving us continued confidence in our long-term financial algorithm, which anticipates mid-single digit revenue growth, and an operating margin rate of eight percent or higher over time."

The Company release stated “For fiscal year 2022, the Company continues to expect low-to mid-single digit revenue growth, an operating margin rate centered on six percent. The Company expects that quarterly, year-over-year profit performance will be variable during the year but to improve as the year progresses. In the Q4 FY 2021 release the Company expected first quarter 2022 operating margin rate to be below the first quarter 2021 rate of 9.8 percent but failed to provide any interim report reflecting the reality of a 5.3 percent operating margin.

Comparable same-store sales fell to 3.9 percent in comparison with Q4 FY 2021 of 8.9 percent.

On April 30th Target posted total assets of $50,842 million, down 5.5 percent from the end of FY2020. Long-term debt and lease obligations attained $17,712 million. Target Corporation had an intraday market capitalization of $98,990 million on May 18th. The Company has traded over the past fifty-two weeks in a range of $155.20 to $268.98 with a 50-day moving average of $223.84.  TGT trades with a forward P/E of 14.6. On May 17th the share closed at $215.29 but after the morning release TGT opened at $160.53 on May 18th.

Twelve-month trailing operating margin was 8.6 percent and profit margin 6.6 percent.  The Company generated a return on assets of 10.8 percent and 51.0 percent on equity.

At the end of FY2021, Target Corporation operated 1,926 stores with a total retail area of 243,284 square feet. The company invested $3,544 million in property and equipment during fiscal 2021.