Target reported Q4 same-store sales that were up 0.7 percent, with same-day services (in-store pickup, Drive Up, and Shipt, all of which represent more than 10 percent of total sales), up 4.3 percent.
According to the company, “total revenue of $31.4 billion grew 1.3 percent in the fourth quarter compared with last year, driven by sales growth of 1.2 percent and an 8.4 percent increase in other revenue. Operating income was $1.2 billion in fourth quarter 2022, down 44.7 percent from $2.1 billion in 2021.”
For the full year, “sales increased 2.8 percent to $107.6 billion from $104.6 billion last year, reflecting a 2.2 percent increase in comparable sales combined with sales from non-mature stores. Full-year total revenue of $109.1 billion grew 2.9 percent compared with 2021, reflecting sales growth of 2.8 percent and a 9.8 percent increase in other revenue.”
CNBC writes that CEO Brian Cornell said in a prepared statement that “the company performed well, despite ‘a very challenging environment,’ with groceries, beauty items and household essentials lifting sales as consumers focused on necessities … We know inflation is still high — it’s been very stubborn. It’s still at a very high level. We know interest rates are rising. And we’re going to watch the consumer really carefully’.”
CNBC also writes that “Target plans to spend less on capital expenditures than this past fiscal year, when it spent $5.5 billion. Its goal for store projects is also slightly lower compared to the 23 new stores and about 200 remodeled ones it announced for fiscal 2022.
“The investment plans underscore a dilemma that other retailers face, as well: As the economic backdrop remains uncertain and high inflation persists, companies will have to get creative and work harder to win over customers — or risk posting weak sales … Alongside its investment plans, Target said it aims to reduce up to $3 billion in total costs over the next three years, saying it wanted to become more efficient after its revenue grew about 40% since 2019.”
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