US-based department store chain Target has reported that its comparable sales for the first quarter (Q1) of the fiscal year 2022 (FY22) grew by 3.3%, against 22.9% in the same period of last year.

During the quarter, the company’s store sales grew by 3.4%. More than 95% its of Q1 sales were fulfilled by stores, while its digital sales grew 3.2%.

Target’s total revenue increased by 4.0% to $25.2bn, driven by a total sales growth of 4.0% and a 6.7% increase in other revenue.

Its operating income declined by 43.3% to $1.3bn compared with $2.4bn in Q1 2021, while its operating income margin rate was 5.3%, against 9.8% in the prior-year period.

For the quarter, Target reported earnings per share (EPS) of $2.16 calculated according to generally accepted accounting principles (GAAP). This represents a 48.2% decline from Q1 2021.

The retailer’s adjusted EPS was $2.19, down by 40.7% from a year earlier.

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Target chairman and CEO Brian Cornell said: “Our first-quarter results mark Target’s 20th consecutive quarter of sales growth, with comp sales growing more than 3% on top of a 23% increase one year ago.

“Guests continue to depend on Target for our broad and affordable product assortment, as reflected in Q1 guest traffic growth of nearly 4%.

“Throughout the quarter, we faced unexpectedly high costs, driven by a number of factors, resulting in profitability that came in well below our expectations, and well below where we expect to operate over time.

“Despite these near-term challenges, our team remains passionately dedicated to our guests and serving their needs, giving us continued confidence in our long-term financial algorithm, which anticipates mid-single digit revenue growth, and an operating margin rate of 8% or higher over time.”

For FY22, Target anticipates revenue growth in the low to mid-single digits, while its operating income margin rate is forecast at around 6%.