On November 15th Target Corporation (TGT) posted results for Q3 of FY2023 ending October 28th with earnings far exceeding consensus estimates. For the quarter, the Company earned $971 million on revenue of $25,398 million with a diluted EPS of $2.10. For the corresponding Q3 of FY 2022, ending October 29th Target earned $712 million on sales of $26,518 million with a diluted EPS of $1.54. Revenue was 4.3 percent lower due in part to reduced spending by consumers. For Q3 2023 gross margin was 28.5 percent compared to Q3 2022. Operating margin was 5.2 percent compared to 3.9 percent and profit margin attained 3.8 percent compared to 2.7 percent for Q3 2022.
In commenting on results Brian Cornell Chairman and CEO stated “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."
Comparable same-store sales declined by 4.9 percent compared to Q3 FY 2022. Same-day services (Shipt and drive-up) increased by eight percent.
The Company release included guidance, “For Q4 2023, the Company expects a low-to mid-single digit decline in revenue and adjusted EPS will range from $1.90 to $2.60”.
On October 28th Target posted total assets of $56,229 million, up 5.4 percent from January 28th 2023. Long-term debt and lease obligations attained $19,766 million. Target Corporation had an intraday market capitalization of $59,960 million on November 18th.
Target trades with a forward P/E of 14.4. The Company has traded over the past fifty-two weeks in a range of $102.93 to $181.70 with a 50-day moving average of $112.79. On November 15th the share closed at $110.67 but after the release on November 16th TGT opened at $130.54 an advance of 18.0 percent.
Twelve-month trailing operating margin was 5.1 percent and profit margin 3.4 percent. The Company generated a return on assets of 5.7 percent and 30.9 percent on equity.