American retailer Target Corporation has reported a slight decline in sales for fiscal 2023 (FY23), with total sales dropping by 1.7 per cent to $105.8 billion from $107.6 billion in the previous year. This decrease was attributed to a 3.7 per cent fall in comparable sales, slightly mitigated by contributions from non-mature stores and an additional week in the fiscal calendar.

The retailer's total revenue also saw a marginal decrease of 1.6 per cent, ending the year at $107.4 billion, impacted by the sales decline but partially compensated by a 5.1 per cent rise in other revenues.

Despite the downturn in sales, Target experienced a significant boost in operating income, which surged by 48.3 per cent to $5.7 billion in FY23, up from $3.8 billion last year. The company attributed this growth to an improvement in its full-year gross margin rate, which increased to 26.5 per cent from 23.6 per cent in FY22, Target said in a press release.

In the fourth quarter of FY23 (Q4 FY23), Target faced a 4.4 per cent decrease in total comparable sales, with comparable store sales and comparable digital sales declining by 5.4 per cent and 0.7 per cent, respectively. However, the quarter saw total revenue rise by 1.7 per cent to $31.9 billion, fuelled by a 1.6 per cent increase in sales and a 9.8 per cent jump in other revenues.

Operating income for the quarter also saw a notable rise, reaching $1.9 billion, up 60.9 per cent from $1.2 billion in the same period last year. This resulted in an operating income margin rate of 5.8 per cent in Q4 FY23, compared to 3.7 per cent in Q4 FY22, with the quarter's gross margin rate improving to 25.6 per cent from 22.7 per cent.

"Our team's efforts changed the momentum of our business, further improving our sales and traffic trends in the fourth quarter while driving profitability well ahead of expectations," said Brian Cornell, chairman and chief executive officer of Target Corporation.

Fibre2Fashion News Desk (DP)

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