Retail corporation Target has reported total revenue of $24.8bn in the second quarter (Q2) of fiscal year 2023 (FY23), down 4.9% from the same period in fiscal year 2022 (FY22).
Comparable sales for the retailer declined 5.4% over the quarter, driven by a 4.3% decline in comparable store sales and a 10.5% decline in comparable digital sales.
Target recorded operating income of $1.2bn in Q2 FY23, up 273.0% compared with the corresponding period in FY22.
Its operating margin for the quarter was 4.8% in Q2 2023, increasing by more than three percentage points from Q2 FY22.
The retailer’s net earnings for the quarter ending 29 July 2023 was $835m, up 356.5% from the same period in 2022.
Diluted earnings per share (EPS) also increased from $0.39 in Q2 FY22 to $1.80 in the latest quarter of 2023.
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Target chair and chief executive Brian Cornell said: “Our second quarter financial results clearly demonstrate the agility of our team and the resilience of our business model, as we saw better-than-expected profitability in the face of softer-than-expected sales.
“With the benefit of a much-leaner inventory position than a year ago, the team was able to quickly respond to rapidly-changing topline trends throughout the second quarter, while continuing to focus on the guest experience.”
For the full year of 2023, Target expects GAAP and adjusted EPS of $7.00 to $8.00.
The company also expects comparable sales in a wide range around a mid-single-digit decline and GAAP and adjusted EPS of $1.20 to $1.60 in Q2 2023.
Cornell added: “As we move into the Fall, the team is gearing up for the biggest seasons of the year, with a focus on continuing to serve our guests with newness throughout our assortment. At the same time, we continue to take a cautious approach to planning our business and have therefore adjusted our financial guidance in anticipation of continued near-term challenges on the topline.”