In the fourth quarter, Target comparable store sales gained, although earnings slipped as it announced not only financial results but a new strategic plan.
Net earnings were $1.1 billion, or $2.41 per diluted share, versus $1.38 billion, or $2.98 per diluted share, in the year-earlier period.
A Zacks Investment Research analyst consensus estimate called for earnings per diluted share of $2.25 and revenues of $30.77 billion.
Target reported that fourth-quarter comparable sales gained 1.5% year over year, reflecting strong traffic and digital performance. Comp sales trends in apparel and hardlines accelerated by almost four percentage points compared to the third quarter.
The company added that digital comps advanced 8.7% in the fourth quarter year over year, and same-day delivery, bolstered by the growth of the Target Circle 360 loyalty program, increased by about 25%.
Net sales were $30.92 billion versus $31.92 billion in the year-previous quarter. Operating income was $1.47 billion versus $1.87 billion in the year-before period.
For the full fiscal year, net earnings were $4.09 billion, or $8.86 per diluted share, versus $4.14 billion, or $8.94 per diluted share, in the year earlier.
Net sales were $106.57 billion versus $107.41 billion in the year previous with comps up 0.1%. Operating income was $5.57 billion versus $5.71 billion in the year before.
On that basis, full-year 2024 net sales declined 0.8%, and earnings per share declined 0.9% from the year before. Target maintained that, based on its estimate of the impact from the extra fiscal week in 2023, the company’s 2024 full-year net sales increased about 1% and earnings per share were up almost 3% from the year past.
“Our team grew traffic and delivered better-than-expected sales and profitability in our biggest quarter of the year,” said Target chair and CEO Brian Cornell. “Results were led by strong performance in beauty, apparel, entertainment, sporting goods and toys. As we look ahead, our continued investments in digital capabilities, stores and supply chain, combined with a focus on newness, value, speed and reliability, will further differentiate our one-of-a-kind physical and digital shopping experience. Consumers continue to be drawn to the everyday discovery and delight that only Target can deliver, and we’re committed to leveraging our strategy, scale and unique position in retail to build on this distinct competitive advantage and drive long-term profitable growth.”
As for its new strategic plan, Target maintained that the company is reimagining key categories including home, as noted, and will bring more innovation to the range of own brands it offers. In food, the company indicated that it slated a new Good & Gather collaboration with celebrated chefs kicking off March 9 and featuring James Beard Award-winner Chef Ann Kim.
Target will look for new cross-industry partnerships, such as a recently announced initiative with Disney to sell plush and bedding products under the company’s Pillowfort private label. Target also plans to cycle apparel more quickly and deliver more newness in the beauty category.
In regards to the strategic update, Cornell said, “Shoppers continue to seek differentiated options and distinctive shopping experiences without sacrificing value, and Target has the scale, strategy and capabilities to support all the ways consumers shop and engage with brands. With gains in consumer traffic, continuing improvements in speed and reliability, and accelerating growth across digital capabilities, we are doubling down on initiatives that scale these capabilities and drive meaningful top-line and bottom-line growth. Our strategy is all about creating today’s Tarzhay, offering everyday discovery and delight for millions of families and ensuring Target is a consumer favorite for years to come.”
