Target posts hefty fourth quarter profit but sales suggest Americans remain cautious
Target is reporting a 58% increase in fourth-quarter profits and handily beat Wall Street expectations as the retailer cut costs and maintained a lean inventory during the holiday season
NEW YORK — Target reported a 58% increase in fourth-quarter profits and handily beat Wall Street expectations as the retailer cut costs and maintained a lean inventory during the critical holiday season.
Revenue rose slightly from a year ago and also topped projections. Comparable sales — those from stores or digital channels operating at least 12 months — slipped 4.4%. But declines appear to be slowing compared with the 4.9% drop in the third quarter and 5.4% drop in the second.
The Minneapolis company offered a cautious outlook on sales and profits.
The results came out just hours ahead of Target's annual investor meeting that should offer clues about its strategies for improving sales to customers being squeezed by inflation and high borrowing and credit card costs.
Target is more vulnerable than Walmart and other big box discounters. More than 50% of its annual sales come from discretionary items like toys, fashion and electronic gadgets, things that many Americans have stopped buying.
Target has been trying to strike the right balance between offering good value, while also infusing the stores with trendy goods. Last month, the retailer launched a new collection called Dealworthy, which features nearly 400 everyday basics, starting at less than $1, with most items under $10. They include clothing and accessories, home items and electronics.
At the same time, Target's deal, struck last year, with designer Kendra Scott to offer exclusive collections of earrings, necklaces has resonated with shoppers. So has its new kitchenware
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