Target Sales Drop In Q4
Target closed out its fiscal year 2024 with a drop in fourth-quarter sales that also served as a drag on full-year results.
For the quarter ended February 1, net sales were $30.9 million, down 3.1% from the comparable quarter the previous year. Net earnings were down 20.2% to $1.1 billion as diluted earnings per share fell 19.3% to $2.41. The fourth quarter of 2023 included an additional week.
Comparable sales increased 1.5% in the fourth quarter, reflecting a comparable store sales decline of 0.5% and a comparable digital sales increase of 8.7%. Comparable sales in apparel and hardlines accelerated nearly 4% as compared to the third quarter, company officials said. Same-day sales powered by Target Circle 360 were up more than 25%.
Full-year net sales decreased 0.8% to $106.6 billion, reflecting a 0.1% increase in comparable sales as well as the benefit of sales from new stores and growth in non-merchandise revenues, offset by the impact of one fewer week of sales in 2024.
For the full year, Target officials said beauty delivered mid-single-digit comparable sales growth, with food & beverage, apparel, and essentials also delivering growth.
Traffic grew 1.4%, reflecting increases in both stores and digital channels.
"Our team grew traffic and delivered better-than-expected sales and profitability in our biggest quarter of the year," said Brian Cornell, chair and chief executive officer of Target Corporation. "As we look ahead, our continued investments in digital capabilities, stores, and supply chain—combined with a focus on newness, value, speed, and reliability—will further differentiate our one-of-a-kind physical and digital shopping experience.”
For fiscal year 2025, the company is forecasting net sales growth in the neighborhood of 1%, reflecting flat comparable sales growth. Target officials also expect to see year-over-year profit pressure in the first quarter given ongoing consumer uncertainty and a small decline in February net sales combined with uncertainty over tariffs.
Chief Financial Officer Jim Lee said that despite “record performance” around Valentine’s Day, the retailer’s topline in February was soft as cold weather across the U.S. affected apparel sales, and declining consumer confidence impacted its discretionary assortment overall.
“Looking ahead, we expect to see a moderation in this trend as apparel sales respond to warmer weather around the country, and consumers turn to Target for upcoming seasonal moments such as the Easter holiday,” he said. “We will continue to monitor these trends and will remain appropriately cautious with our expectations for the year ahead.”
