American retailer Target Corporation has reported a 4.2 per cent decline in total revenue to $25.4 billion in the third quarter of fiscal 2023 (Q3 FY23), compared to the same period in the previous year. The company saw its comparable sales dip by 4.9 per cent, with a 4.6 per cent decrease in store sales and a 6 per cent fall in digital sales.

Despite these challenges, Target's operating income for Q3 FY23 stood at $1.3 billion, a notable 28.9 per cent increase from last year. This surge was primarily attributed to a higher gross margin rate, which reached 27.4 per cent, up from 24.7 per cent in 2022. The operating income margin rate also improved, standing at 5.2 per cent, compared to 3.9 per cent in the same quarter of the previous year, the company said in a press release.

However, the quarter saw an increase in selling, general, and administrative expenses, which rose to 20.9 per cent from 19.7 per cent in Q3 FY22.

In terms of earnings, the company reported both GAAP and adjusted earnings per share (EPS) of $2.10 for Q3 FY23, a significant 36.3 per cent increase from $1.54 in the same quarter of FY22. Target also reported a streamlined inventory level at the end of Q3, which was 14 per cent lower than the previous year.

"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," said Brian Cornell, chair and chief executive of Target Corporation.

Looking ahead to the fourth quarter, Target anticipates comparable sales to experience a mid-single digit decline. The company also forecasts a GAAP and adjusted EPS ranging between $1.90 and $2.60.

Fibre2Fashion News Desk (DP)

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