American discount retailer Target (TGT) has issued fourth quarter 2023 financial results that beat Wall Street’s expectations for both sales and profits.
The Minneapolis-based company announced earnings per share (EPS) of $2.98 U.S. versus $2.42 U.S. that was expected among analysts.
Revenue in the final quarter of last year totaled $31.92 billion U.S. compared to $31.83 billion U.S. that was forecast on Wall Street.
The company’s margins also improved in the quarter, with its operating income margin rate coming in at 5.8% compared with 3.7% a year earlier.
Despite the Q4 beat, Target issued a downbeat forecast for the year ahead, saying it expects weak sales throughout 2024.
For the current first quarter, Target said it expects sales to decline between 3% and 5% and adjusted earnings per share to range from $1.70 U.S. to $2.10 U.S.
The company added that it expects full-year 2024 sales to be flat to up 2% and earnings to range from $8.60 U.S. to $9.60 U.S. per share.
Even though the forward guidance was soft, Target did manage to grow its profits in Q4 2023 through better management of its inventory and lower e-commerce fulfillment costs.
Going forward, Target plans to implement new sales drivers, including a membership rewards program, to help accelerate the company’s growth.
To attract shoppers, the big-box retailer has emphasized value in recent months. During year-end holidays, Target touted a wide assortment of gifts and food items for under $25 U.S.
In February of this year, Target launched a new low-priced private brand called “Dealworthy,” with products such as socks, laundry detergent and other items available for less than $10 U.S.
Target’s stock has declined 9% over the past 12 months and currently trades at $150.49 U.S. per share.
