Target shares rise by 10% after it announces financial results


Target Corporation (NYSE: TGTshares shot up 10% after it announced its full-year and fourth-quarter financial results for 2021. Target recorded $3.21 GAAP earnings per share in the fourth quarter, topping the $2.73 it reported in the previous fiscal year. For the full-year, the GAAP earnings per share came to $14.1. 

The company recorded $3.19 adjusted earnings per share in the fourth quarter of 2021, more than the $2.67 it recorded in the previous fiscal year. Full-year GAAP earnings per share included a pre-tax gain on the Dermstore sale of around $335 million, which was not in the adjusted EPS. 

How does management feel?

Target’s Chief Executive Officer and Chairman, Brian Cornell, said:

Our strong fourth-quarter performance capped off a year of record growth in 2021, reinforcing the durability of our business model and our confidence in long-term profitable growth.

The CEO and Chair continued to say:

As we look ahead, we’ll keep investing and delivering on all that has earned the loyalty and trust of our guests; that starts with our outstanding team and includes continued differentiation through affordability, assortment, ease and convenience.

Financial outlook for 2022 

For the financial year of 2022, Target predicts mid-to-low single-digit revenue increases, high single-digit Adjusted EPS growth, low single-digit operating margins growth, and an 8% or higher operating margin rate. 

The company also expects varied quarterly, year-over-year profit margins during the course of the year, which will generally get better as the year progresses. Target predicts a favorable operating margin rate in the first quarter of 2022 because of historical performance. However, even though it believes it’ll do well, it expects a percentage rate below what it recorded in Q1 2021. 

The company’s long-term financial algorithm has also been improved, and this will help define Target’s expectations for the financial year of 2023 and beyond. 

Target’s comparable sales increased by 8.9% in the fourth quarter of 2021, including a 9.2% digital sales growth and a 8.9% comparable stores sales growth. 

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