| Target Corporation (NYSE: TGT) today announced its third quarter 2024 financial results, reflecting comparable sales growth driven entirely by traffic and strength in the digital channel. |
| The Company reported third-quarter GAAP and Adjusted earnings per share1 (EPS) of $1.85, compared with $2.10 in 2023. The attached tables provide a reconciliation of non-GAAP to GAAP measures. All earnings per share figures refer to diluted EPS. |
| Adjusted EPS, a non-GAAP financial measure, excludes the impact of certain discretely managed items, when applicable. See the tables of this release for additional information. |
"I'm proud of our team's efforts to navigate through a volatile operating environment during the third quarter. We saw several strengths across the business, including a 2.4 per cent increase in traffic, nearly 11 per cent growth in the digital channel, and continued growth in beauty and frequency categories. At the same time, we encountered some unique challenges and cost pressures that impacted our bottom-line performance," said Brian Cornell, chair and chief executive officer of Target Corporation. "Looking ahead, our team is energized and ready to deliver the unique combination of newness and value that holiday shoppers can only find at Target, and we remain confident in the underlying strength and fundamentals of our business, and our ability to deliver on our longer-term financial goals." |
| Guidance |
| For the fourth quarter, the Company expects approximately flat comparable sales and GAAP and Adjusted EPS of $1.85 to $2.45, translating to a full-year expected GAAP and Adjusted EPS range of $8.30 to $8.90. |
| Operating Results |
| Comparable sales increased by 0.3 per cent in the third quarter, reflecting a comparable store sales decline of 1.9 per cent and a comparable digital sales increase of 10.8 per cent. Total revenue of $25.7 billion in the third quarter was 1.1 per cent higher than last year, reflecting a total sales increase of 0.9 per cent and an 11.5 per cent increase in other revenue. Third quarter operating income of $1.2 billion was 11.2 per cent lower than last year. |
| The third quarter operating income margin rate was 4.6 per cent in 2024, compared with 5.2 per cent in 2023. The third quarter gross margin rate was 27.2 per cent, compared with 27.4 per cent in 2023, reflecting higher digital fulfilment and supply chain costs due to the cost of managing higher inventory levels, increased digital sales volume, and new supply chain facilities coming online, partially offset by the lower book to physical inventory adjustments and the net impact of merchandising activities as compared to the prior year. The third quarter SG&A expense rate was 21.4 per cent in 2024, compared with 20.9 per cent in 2023, reflecting the combined impact of higher costs, including higher team member pay and benefits and higher general liability expenses, partially offset by disciplined cost management. |
| Interest Expenses and Taxes |
| The Company's third quarter 2024 net interest expense was $105 million, compared with $107 million last year. |
| The third quarter 2024 effective income tax rate was 21.7 per cent, compared with the prior year's rate of 21.3 per cent, reflecting lower discrete benefits in the current year. |
| Capital Deployment and Return on Invested Capital |
| The Company paid dividends of $516 million in the third quarter, compared with $507 million last year, reflecting a 1.8 per cent increase in the dividend per share. |
| The Company repurchased $354 million of its shares in the third quarter, retiring 2.4 million shares of common stock at an average price of $147.43. As of the end of the quarter, the Company had approximately $9.2 billion of remaining capacity under the repurchase program approved by Target's Board of Directors in August 2021. |
| For the trailing twelve months through the third quarter of 2024, after-tax return on invested capital (ROIC) was 15.9 per cent, compared with 13.9 per cent for the trailing twelve months through the third quarter of 2023. The increase in ROIC reflects higher operating income, partially offset by higher average invested capital. The tables in this release provide additional information about the Company's ROIC calculation. |
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| Target Corporation |
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