Target on Tuesday said sales rose 9% in the fiscal fourth quarter, as it weathered supply chain challenges over the holidays and built on e-commerce and customer gains during the pandemic.
The discounter said it expects sales to keep increasing this year, even as shoppers see prices of food, fuel and other goods creep higher. It forecast revenue growth in the low to mid single-digits and projected adjusted earnings per share to rise by high single-digits. Those are above analysts’ expectations, according to Refinitiv.
Shares are up nearly 8% in premarket trading.
The big-box retailer will hold its first in-person investor day in New York City since the start of the pandemic, a two-year span that has turbocharged Target’s stock price and revenue. Shares of the company have soared 84% since mid-March 2020, when Covid-19 was declared a pandemic. Its annual revenue has reached $106 billion, up nearly 36% over the past two years.
Investors will listen for how Target will compete for consumers’ money and time, as people juggle more spending priorities in a reopening world and feel the sting of inflation.
CEO Brian Cornell said in a news release that Target will continue to differentiate “through affordability, assortment, ease and convenience.”
To do that, Cornell said in November that Target would protect low prices, even if that meant absorbing some of the higher costs of transportation, materials and labor.
The company is also leaning into online services, which gained a following as safe, contactless ways to shop. Starting in the fall, customers can make returns or pick up a Starbucks coffee without leaving the car at select stores – perks that may appeal as people juggle fuller social calendars again.
Sales through Target’s same-day services – which include Drive Up, its curbside pickup option; Order Pickup, its in-store retrieval of online purchases; and Shipt, its home delivery service – grew by 45% in the fiscal year. That’s after 235% growth in 2020.
Here’s what Target reported for the fiscal fourth quarter ended Jan. 29, compared with Refinitiv consensus estimates:
- Earnings per share: $3.19 adjusted vs. $2.86, expected
- Revenue: $31 billion vs. $31.39 billion expected
Net income rose about 12% to $1.54 billion, or $3.21 per share, from $1.38 billion, or $2.73 per share, a year earlier. Excluding items, the retailer earned $3.19 per share, higher than the $2.86 per share expected by analysts surveyed by Refinitiv.
Total revenue increased to $31 billion from the same period a year ago, slightly below analysts’ expectations of $31.39 billion.
Target faces challenging comparisons due to the pandemic. In the holiday quarter, for instance, it went up against a year-ago period when Americans had extra dollars from stimulus checks to spend on holiday gifts and some Americans chose to consolidate shopping trips to reduce risk.
Comparable sales, a key retail metric that tracks sales online and at stores open at least a year, increased 8.9% in the…
Read More: Target (TGT) Q4 2021 earnings