US retailer Target Corporation's comparable sales up 2.6% in Q2

18 Aug '22

2 min read

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The comparable sales of Target Corporation grew 2.6 per cent in the second quarter of fiscal 2022, reflecting comparable store sales growth of 1.3 per cent and comparable digital sales growth of 9 per cent. Total revenue of $26 billion grew 3.5 per cent, reflecting total sales growth of 3.3 per cent and a 14.8 per cent increase in other revenue.

Operating income was $321 million in second quarter 2022, down 87.0 per cent from $2.5 billion in 2021, reflecting a decline in the company's gross margin rate. Second quarter operating income margin rate was 1.2 per cent in 2022, compared with 9.8 per cent in 2021. The second quarter gross margin rate was 21.5 per cent, compared with 30.4 per cent in 2021. This year's gross margin rate reflected higher markdown rates, driven primarily by inventory impairments and actions taken to address lower-than-expected sales in discretionary categories, as well as higher merchandise, inventory shrink, and freight costs.

The company reported second quarter GAAP earnings per share (EPS) of $0.39, down 89.2 per cent from $3.65 in 2021. Second quarter adjusted EPS of $0.39 decreased 89.2 per cent compared with $3.64 in 2021, the company said in a press release.

“I’m really pleased with the underlying performance of our business, which continues to grow traffic and sales while delivering broad-based unit-share gains in a very challenging environment,” said Brian Cornell, chairman and chief executive officer of Target Corporation. “I want to thank our team for their tireless work to deliver on the inventory rightsizing goals we announced in June. While these inventory actions put significant pressure on our near-term profitability, we’re confident this was the right long-term decision in support of our guests, our team and our business. Looking ahead, the team is energized and ready to serve our guests in the back half of the year, with a safe, clean, uncluttered shopping experience, compelling value across every category, and a fresh assortment to serve our guests’ wants and needs.”

While the company is planning cautiously for the remainder of the year, current trends support the company’s prior guidance for full-year revenue growth in the low- to mid-single digit range, and an operating margin rate in a range around 6 per cent in the back half of the year.

Fibre2Fashion News Desk (RR)

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