Target Q1 Sales Drop, But Meet Company Expectations
First quarter sales at Target were down 3.1% with spending declines in discretionary categories cited as the main culprit.
For the three months ended May 4, total revenue was $24.5 billion, down from total revenue of $25.3 billion in the comparable quarter the previous year. Comparable sales declined 3.7% in the first quarter, reflecting a comparable store sales decline of 4.8% partially offset by a comparable digital sales increase of 1.4%.
Net earnings in the quarter were $942 million, down 0.8% from the first quarter the previous year. Diluted earnings per share in the quarter were $2.03, down 1% from the same quarter the prior year.
Despite the drop in sales, Brian Cornell, chair and CEO of Target, said the retailer’s first quarter performance was in line with company expectations on both the top and bottom line, tracking the trajectory previously outlined for this year and setting up a return to growth in the second quarter.
“Looking ahead, our team will deliver for our guests through lower prices, a seasonally relevant assortment, ease, and convenience, as we keep investing in our strategy and efficiency initiatives to get back to growth and deliver on our longer-term financial goals."
— Brian Cornell, Target
"Our topline performance improved for the third consecutive quarter, with growth in our digital business led by strength in our same-day fulfillment services,” he said. “Consumers continue to respond to the newness and value that we offer across our shopping experience, and we're pleased with early results from the relaunch of Target Circle.”
He continued, “Looking ahead, our team will deliver for our guests through lower prices, a seasonally relevant assortment, ease, and convenience, as we keep investing in our strategy and efficiency initiatives to get back to growth and deliver on our longer-term financial goals."
During the first quarter, Target reintroduced its Target Circle program, which brings Target Circle, Target Circle Card, and Target Circle 360 together. The retailer said its April Target Circle Week was its largest ever with millions of more guests shopping this year’s event than in 2023.
Before releasing first quarter results, Target said it would be lowering prices on approximately 5,000 items across the store. Shoppers will have access to savings on everyday items such as milk, meat, bread, soda, fresh fruit and vegetables, snacks, yogurt, peanut butter, coffee, diapers, paper towels, pet food, and more. These price reductions will collectively save consumers millions of dollars this summer, officials with the retailer said.
The new price cuts follow recently reduced price reduction on some 1,500 items and thousands of additional price cuts are planned over the summer.
