Target Q3: Sales drop 4.9 percent but profit beats expectations

Target Q3: Sales drop 4.9 percent but profit beats expectations

THE WHAT? Target has announced its results for the third quarter of fiscal 2023. The US retailer said that its revenue of US$25.4 billion (-4.2 percent) was consistent with expectations, while its profit beat analysts’ forecasts, with adjusted EPS up 36.3 percent to US$2.10.

THE DETAILS Inventory shrink continues to be an issue, Target said, but lower markdowns and other inventory-related costs, lower freight costs, lower supply chain and digital fulfilment costs and favorable category mix helped mitigate against this for a third quarter income margin rate of 5.2 percent versus 2022’s 3.9 percent.

THE WHY? Brian Cornell, Chair and Chief Executive of Target Corporation, reveals, “In the third quarter, our team continued to successfully navigate our business through a very challenging external environment. While third quarter sales were consistent with our expectations, earnings per share came in far ahead of our forecast. This profit performance benefited from our team’s commitment to efficiency and disciplined inventory management, and I’d like to thank them for their tireless efforts. Looking ahead, we’re continuing to make investments throughout our business – in our assortment, our team and the services we offer – to provide the newness, affordability and convenience our guests want during the holiday season and beyond.”