Target Corporation Reports Third Quarter 2024 Financial Results
Minneapolis-based Target Corporation (NYSE: TGT) has announced its financial results for the third quarter of 2024, which ended on November 20, 2024.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | YoY Change | Consensus Estimate |
|---|---|---|---|---|
| Total Revenue | $25.7B | $25.4B | +1.1% | $30.56B |
| EPS (GAAP & Adjusted) | $1.85 | $2.10 | -11.9% | $2.38 |
| Operating Income | $1.2B | $1.35B | -11.2% | N/A |
Target's overall financial performance in Q3 2024 shows modest growth in total revenue compared to the previous year, although the earnings per share (EPS) fell short year-over-year and did not meet consensus estimates. This decline is attributed partly to unique challenges and cost pressures impacting bottom-line performance, despite strong digital sales and guest traffic growth.
Revenue Performance by Segment
| Segment | Growth Compared to Prior Year |
|---|---|
| Digital Sales | +10.8% |
| Beauty | +6% |
| Food & Beverage, Essentials | Low-single-digit growth |
Target saw a notable increase in digital sales, bolstered by same-day delivery services and robust performance of their Drive Up service. The beauty segment observed a strong 6 percent growth, while the Food & Beverage and Essentials categories grew at a low-single-digit rate, indicating resilience and effective engagement with consumers across these key areas.
Key Developments & Operational Highlights
- Guest traffic increased by 2.4 percent compared to the prior year.
- Digital comparable sales grew by 10.8 percent, with nearly 20 percent growth in same-day delivery.
- The third quarter gross margin rate slightly decreased by 0.2 percentage points year-over-year, due to higher digital fulfillment and supply chain costs.
Comments from Company Officers
Brian Cornell, chair and CEO of Target Corporation, stated, 'I'm proud of our team's efforts to navigate through a volatile operating environment during the third quarter. While we faced challenges, the strength in digital channels and increased guest traffic remain promising. As we prepare for the holiday season, our team is ready to deliver unique value and freshness to our customers.'
Dividends & Share Repurchase Program
Target increased its dividend payment to $516 million in the third quarter, reflecting a 1.8 percent increase per share. Additionally, the company repurchased 2.4 million shares at an average price of $147.43, totaling $354 million. This leaves $9.2 billion in repurchase capacity under its current program.
Forward Guidance
For the fourth quarter, Target anticipates flat comparable sales and projects GAAP and Adjusted EPS in the range of $1.85 to $2.45. Full-year expectations for GAAP and Adjusted EPS are set between $8.30 and $8.90.
Stock Price Movement
Following the earnings release, Target experienced a significant after-event stock price decline of approximately 22 percent, reflecting market reactions to third quarter financial results and guidance.
Overall, Target continues to adapt to evolving market dynamics with a focus on digital expansion and customer engagement strategies, despite facing some financial headwinds in the short term.
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