Target Corporation reports $106.6bn in net sales for 2024 and expects growth in 2025

Overview

Target Corporation delivered stable financial results for fiscal year 2024, navigating economic uncertainties while achieving modest sales growth in key categories. The company reported $106.6bn in net sales, reflecting a 0.8% year-over-year decline due to the impact of one fewer week of sales compared to fiscal 2023. On a comparable 52-week basis, however, net sales increased by 1% YoY, mainly driven by strength in Beauty, Food & Beverage, and Apparel.

CEO Brian Cornell highlighted Target’s continued progress: “Our team grew traffic and delivered better-than-expected sales and profitability in our biggest quarter of the year. Results were led by strong performance in Beauty, Apparel, Entertainment, Sporting Goods and Toys. 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. Consumers continue to be drawn to the everyday discovery and delight that only Target can deliver, and we’re committed to leveraging our strategy, scale and unique position in retail to build on this distinct competitive advantage and drive long-term profitable growth.”

Q4 2024 vs. Q4 2023:

Comparable sales increased 1.5%, reflecting higher digital and in-store traffic, while net sales declined slightly to a value of $30.9bn (-3.1% YoY), with slight decreases in all major segments, impacted by the extra week in 2023.
Digital sales grew 8.7% YoY, led by Target Circle 360™ Same-Day delivery, which surged more than 25% YoY.
GAAP and adjusted EPS was $2.41 (-19.3% vs. Q4 2023), near the upper end of guidance, reflecting strength in Toys, Electronics, and Apparel.
Operating income declined to $1.47bn (-21.3% YoY), as gross margin pressures offset revenue gains. In the same way, net earnings were on a downward trend, reaching the value of 1.1bn (-20.2% YoY).
Gross margin rate was 26.2% (compared to 26.6% in Q4 2023), reflecting higher supply chain costs and increased promotional activity.

Full-Year 2024 highlights:

Net sales record a value of $106.6bn (-0.8% YoY), but up 1% on a comparable 52-week basis.
Comparable sales grew 0.1% YoY, driven by gains in Beauty, Food & Beverage, and Essentials. Traffic grew 1.4% YoY, reflecting increases in both stores and digital channels.
GAAP and adjusted EPS was $8.86 (-0.9% vs. 2023), but in line with the company’s guidance.
Operating income declined to $5.6bn (-2.5% YoY), impacted by higher promotional markdowns and digital fulfillment costs, while net earnings also decreased to $4.09bn (-1.1% YoY).
Gross margin rate was 28.2% (up from 27.5% in 2023), reflecting improved product cost efficiencies.
SG&A expense rate rose to 20.6% (up from 20.0% in 2023), driven by higher wages and operational investments.
Total dividends paid by the company were $2.05bn, reflecting a 1.8% increase per share, with share repurchases of $1.01bn, reducing shares outstanding by 3.7m.
Cash and cash equivalents at end of period increased to $4.76bn (+25% YoY), reflecting a good liquidity and possibility of future investments.

For fiscal year 2025, Target anticipates net sales growth of approximately 1%, supported by stable comparable sales and continued store expansion. The company expects modest improvements in operating margins, driven by cost efficiencies and pricing discipline. GAAP and adjusted EPS are forecasted to range between $8.80 and $9.80, reflecting stable profitability. Target also projects an effective tax rate between 23% and 24%, in line with prior-year levels. Additionally, the company will maintain its focus on digital investments and operational improvements, reinforcing its long-term commitment to enhancing customer experience and driving sustainable profitability. Despite a soft start in February 2025 due to weather impacts on apparel sales and declining consumer confidence, Target anticipates stronger performance in the coming quarters as seasonal demand improves and new product offerings drive engagement.

Even though the main results reported slightly beat Wall Street analysts’ estimates, after the report was published, TGT shares lost approximately -4% of their stock price in the pre-market, this decrease being the cause of the weak forecasts for the new fiscal year, one that is expected to be quite uncertain for most industries. Also, in the last month, TGT’s stock price decreased by more than -15%, and at the level of the last year, the decrease is even more evident, by almost -25% compared to the same period last year.