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Financial, Retail

Target Corporation Reports Fourth Quarter and Full-Year 2023 Earnings

Target reports that for 2023 its guests responded to newness, value, and the inspiration and ease of its in-store and digital shopping experience.

Despite pressure on Target's top line results, the retailer continued growing profits and improving traffic and sales.

MINNEAPOLIS -- Target Corporation (NYSE: TGT) announced its fourth-quarter and full-year 2023 results, both of which benefited from an additional week of sales as compared to 2022. The Company reported fourth-quarter GAAP and Adjusted earnings per share (EPS) of $2.98, compared with $1.89 in 2022. GAAP and Adjusted EPS were $8.94 for full-year 2023, compared with $5.98 in GAAP EPS and $6.02 in Adjusted EPS in the prior year. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS.

"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.

"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."

Target reports that the company's operating margins improved in 2023 in part due to efficiency intitiatives.

Q4 2023 Highlights

•  Comparable sales and traffic trends improved sequentially for the second quarter in a row.

•  Same-day services (in-store pickup, Drive Up, and Shipt), which represent more than 10 percent of total sales, increased 13.6 percent in the quarter, led by growth in Drive Up.

•  GAAP and Adjusted EPS1 of $2.98 was 57.6 percent higher than last year, and well-above the high end of the expected range of $1.90 to $2.60.

Full-Year 2023 Highlights

•  Full-year GAAP and Adjusted EPS of $8.94 were both nearly 50 percent higher than in 2022.

•  The Company's operating income margin rate of 5.3 percent was nearly two percentage points higher than last year. Operating income dollars grew by nearly $2 billion compared with 2022, well-above expectations.

•  The Company's efficiency efforts delivered savings of more than $500 million in 2023.

•  Cash from operations more than doubled from $4.0 billion in 2022 to $8.6 billion in 2023.

•  The team maintained appropriate inventory levels by category throughout the year, resulting in lower markdown rates, more effective operations, and stronger in-stock measures compared with 2022.

Target said its exclusive brands and Target-owned brands offered the newness and exclusivity that consumers are seeking at Target.

To see the full release, click here.

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