Omnichannel

Target Q1 sales, traffic on positive track

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May 18, 2022

Target's Q1 2022 earnings reveals a comparable sales growth of 3.3%, traffic growth of 3.9% and digital comparable sales of 3.2%.

Drive-up pickup activity grew by double digits and same-day services, which includes order pickup, grew 8%, according to a press release on the quarterly earnings.

But what is most revealing, given the two years of COVID consumer activity, is that more than 95% of the retailer's first quarter sales were fulfilled by stores.

The company reported first quarter GAAP earnings per share of $2.16, down 48.2% from $4.17 in 2021.

"Our first-quarter results mark Target's 20th-consecutive quarter of sales growth, with comp sales growing more than 3% on top of a 23% increase one year ago," Brian Cornell, chairman and CEO, said in the release. "Guests continue to depend on Target for our broad and affordable product assortment, as reflected in Q1 guest traffic growth of nearly 4%. Throughout the quarter, we faced unexpectedly high costs, driven by a number of factors, resulting in profitability that came in well below our expectations, and well below where we expect to operate over time. Despite these near-term challenges, our team remains passionately dedicated to our guests and serving their needs, giving us continued confidence in our long-term financial algorithm, which anticipates mid-single digit revenue growth, and an operating margin rate of 8% or higher over time."

For the second quarter Target expects its operating income margin rate will be in a wide range centered around first quarter's operating margin rate of 5.3%, and, for the year, expects low- to mid- single digit revenue growth.