On March 5th Target Corporation (TGT) the Nation’s 6th-ranked retailer, posted results for Q4 and FY2023 ending February 3rd, beating estimates for the top and bottom lines. For the quarter, the Company earned $1,382 million on revenue of $31,919 million with a diluted EPS of $2.98. For the corresponding Q4 FY2022, Target earned $876 million on sales of $31,395 million with a diluted EPS of $1.89. Revenue was higher by 1.6 percent and net earnings increased by 57.7 percent. Gross margin increased from 23.2 percent in Q4 FY2022 to 26.7 percent for the most recent quarter. Operating margin rose from 3.7 percent to 5.8 percent.
For FY2023 the Company earned $4,138 million on revenue of $107,402 million with a diluted EPS of $8.94. For the corresponding FY2022, Target earned $2,750 million on sales of $109,120 million with a diluted EPS of $5.98. Inventory was down 11.9 percent from the end of FY2022 reducing markdowns.
For the fourth quarter, comparable same-store sales declined by 5.4 percent. FY2023 comparable sales were down by 3.7 percent due to a reduction of 2.4 percent in transactions offset by a 1.4 percent increase in the average value of each transaction. Digital sales were down 0.7 percent during Q4 compared to a decline of 3.6 percent recorded for Q4 2022. Store-originated sales attained 81.7 percent of total in FY2023 with digital accounting for the remaining 20.3 percent.
Effective April 1st The Company will introduce Target Circle 360, a paid membership benefits program.
In commenting on results Brian Cornell Chairman and CEO stated, Our team’s efforts changed the momentum of our business, further improving our sales and traffic trends in the fourth quarter while driving profitability well ahead of expectations,” said Brian Cornell, chairman and chief executive officer of Target Corporation”. He added "Throughout the season, guests responded to newness, value, and the inspiration and ease of our in-store and digital shopping experience. Looking ahead, we’ll continue to invest in the strengths and differentiators that have delivered strong financial performance over time. We’ll also roll out fresh innovations, including our new Target Circle membership program, as part of our roadmap for growth aimed at meeting consumers where they are, reigniting sales, traffic and market share gains, and positioning Target for profitable growth in 2024 and beyond.”
The Company maintained guidance for fiscal 2024. Target expects a flat to two percent increase in same-store sales growth and an adjusted EPS ranging from $8.60 to $9.60.
At the end of FY2023, Target Corporation operated 1,956 stores with a total retail area of 245,939 square feet excluding offices and DCs. The company invested $4,806 million in property and equipment during FY2023.
On February 3rd Target posted total assets of $55,356 million, up 3.8 percent from the end of FY2022. Long-term debt and lease obligations attained $20,140 million. Target Corporation had an intraday market capitalization of $69,480 million on March 5th. The Company has traded over the past fifty-two weeks in a range of $102.93 to $171.24 with a 50-day moving average of $144.17. TGT trades with a forward P/E of 17.0. On March 4th,pre-release the share closed at $150.79 but after the morning release opened on March 5th at $169.12.
Twelve-month trailing operating margin was 5.5 percent and profit margin 3.4 percent. The Company generated a return on assets of 5.8 percent and 30.9 percent on equity.