Source: Sharecast
Target stated Q4 revenues came to $31.4bn and earnings per share printed at $1.89 each, ahead of Wall Street estimates of $30.72bn and $1.40 per share, respectively.
Same-store sales rose 0.7% in the quarter, and customer traffic, which includes both online and in store, also grew 0.7% in the fourth quarter, while average ticket value were broadly flat.
However, the retailer highlighted that shrinking profits and margins had led it to provide a rather conservative full-year outlook, noting that customers were abandoning discretionary items as a result of the ongoing cost-of-living squeeze.
Target pointed out that food and beverage sales were its strongest category, with comparable sales rising by low double-digits year-on-year, and essentials and beauty sales rising by high single-digits. Home and apparel sales declined.
Operating margins were also weaker in the quarter at 3.7%, down from 3.9% in the prior quarter but ahead of expectations for a print of 3.1%.
Looking ahead, Target expects comparable sales to register either a low single-digit decline or a low single-digit increase in 2023, while full-year earnings per share were pegged to be between $7.75 to $8.75 - below Wall Street expectations for an EPS of $9.23 per share.
As of 1300 GMT, Target shares were up 1.68% in pre-market trading at $169.62 per share.
Reporting by Iain Gilbert at Sharecast.com