Target reports Q3 earnings
Target today announced its third quarter 2024 financial results, reflecting comparable sales growth driven entirely by traffic and strength in the digital channel.
"I'm proud of our team's efforts to navigate through a volatile operating environment during the third quarter," said Brian Cornell, chair and CEO of Target. "We saw several strengths across the business, including a 2.4% increase in traffic, nearly 11% 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."
Cornell added, "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."
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Target reported third quarter GAAP and adjusted earnings per share of $1.85, compared with $2.10 in 2023.
The retailer reported comparable sales increased .3% in the third quarter, reflecting a comparable store sales decline of 1.9% and a comparable digital sales increase of 10.8%. Total revenue of $25.7 billion in the third quarter was 1.1% higher than last year, reflecting a total sales increase of .9 % and an 11.5% increase in other revenue. Third quarter operating income of $1.2 billion was 11.2% lower than last year.
Target also shared that its beauty comparable sales grew more than 6%. Food & beverage and essentials categories grew low-single digits compared to the prior year.
Target's third quarter operating income margin rate was 4.6% in 2024, compared with 5.2% in 2023. Third quarter gross margin rate was 27.2%, compared with 27.4% in 2023, reflecting higher digital fulfillment 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 lower book to physical inventory adjustments and the net impact of merchandising activities as compared to the prior year, the company said.
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For the fourth quarter, Target 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.