Target Raises Full-Year Sales Outlook to 4% After Q1 Revenue Jumps 6.7%
Target’s Q1 net sales rose 6.7% to $25.44bn, with digital sales climbing 8.9% and operating income at $1.13bn. It lifted full-year net sales growth to about 4%, two points above prior guidance, and expects operating margin more than 20 basis points above last year’s 4.6%.
1. Q1 Financial Results
Target reported Q1 net sales of $25.44 billion, up 6.7% year-on-year, with comparable store sales rising 4.7% and digital sales surging 8.9%. Operating income totaled $1.13 billion, while net earnings declined 24.6% to $781 million, reflecting higher costs and investment spending.
2. Raised Full-Year Outlook
Following stronger-than-expected Q1 results, Target raised its full-year net sales growth forecast to about 4%, two percentage points above its prior range. The company now anticipates its operating income margin to exceed last year’s 4.6% by more than 20 basis points.
3. Strategic Investments and Margin Expansion
Target increased capital expenditure by 31% to $1 billion, funding new store openings and remodels. Gross margin widened to 29% from 28.2% on improved supply chain productivity, growth in advertising and membership fees, and lower markdowns, partially offset by higher product costs.