Summary
Target Corporation's first quarter of fiscal year 2022, ending April 30, 2022, saw a 4.0% increase in total revenue, reaching $25.17 billion. This growth was driven by a 3.3% increase in comparable sales, primarily fueled by a 3.9% rise in traffic. However, profitability was significantly impacted, with operating income falling 43.3% year-over-year to $1.35 billion and diluted earnings per share dropping to $2.16 from $4.17 in the prior year. This decline was attributed to a substantial decrease in gross margin rate from 30.0% to 25.7%, largely due to inventory challenges, increased markdowns on discretionary items, and elevated freight and merchandise costs. The company also experienced a significant decrease in cash flow from operations, turning from a positive $1.14 billion to a negative $1.39 billion.
Financial Highlights
49 data points| Revenue | $25.17B |
| Cost of Revenue | $18.46B |
| Gross Profit | $6.71B |
| SG&A Expenses | $4.76B |
| Operating Income | $1.35B |
| Interest Expense | $112.00M |
| Net Income | $1.01B |
| EPS (Basic) | $2.17 |
| EPS (Diluted) | $2.16 |
| Shares Outstanding (Basic) | 464.00M |
| Shares Outstanding (Diluted) | 467.80M |
Key Highlights
- 1Total revenue increased by 4.0% to $25.17 billion, driven by a 3.3% increase in comparable sales and a 3.9% rise in traffic.
- 2Operating income decreased by 43.3% to $1.35 billion, impacted by a significant decline in gross margin.
- 3Diluted earnings per share (EPS) fell sharply to $2.16 from $4.17 in the prior year's quarter, a decline of 48.2%.
- 4Gross margin rate declined significantly to 25.7% from 30.0% in the prior year, mainly due to increased markdowns on discretionary items and higher costs.
- 5Inventory levels increased to $15.1 billion from $10.5 billion in the prior year, reflecting slower sales in discretionary categories and supply chain issues.
- 6Cash flow from operating activities turned negative, decreasing from $1.14 billion provided in the prior year to $1.39 billion used in the current quarter.
- 7The company repurchased $10 million in stock during the quarter (excluding ASR) and declared a dividend of $0.90 per share, a 32.4% increase year-over-year.