Revenue exceeds $25.1 billion! Target's profit halved in the first quarter and its stock price plummeted!

It is learned that on May 18, Target released its 2022Q1 quarterly profit ending April 30, which was far below Wall Street expectations. After the financial report was released, Target's stock price plummeted by nearly 25% to a 52-week low. It was the largest single-day drop since the Black Monday stock market crash in 1987, and lowered its profit expectations.

Target's revenue in the first quarter increased 4% year-on-year to $25.17 billion, higher than the expected $24.49 billion, and its adjusted earnings per share were $2.19, lower than the $3.07 per share predicted by analysts. Last year, its sales were $24.2 billion and its earnings per share were $3.69. Its profit was $1.01 billion, a sharp drop of 51.9% from $2.1 billion in the same period last year.

The profit margin for the first quarter of 2022 was 5.3%, compared with 9.8% in the same period of 2021. The gross profit margin was 25.7%, compared with 30.0% in the same period of 2021. Traffic to Target's stores and its website increased by 3.9%, offline store sales increased by 3.3% year-on-year, and online sales increased by 3.2% year-on-year. Luggage sales increased by more than 50% in the first quarter. Sales of items such as TVs, kitchen appliances and bicycles declined.

Target's CEO said: "A variety of factors, including high shipping costs, inventory issues and falling sales of non-essential items from televisions to bicycles in the first quarter, resulted in profitability far below expectations, but the first quarter also marked the 20th consecutive quarter of sales growth for Target." Walmart also announced Q1 financial results that were lower than expected. Similarly, due to the pressure of high inventory and high costs that hit profits hard, Walmart's stock price recorded its largest single-day drop in 35 years on the 17th.

It is learned that Target expects revenue to continue to grow in the low-to-mid single digits in 2022, with a profit margin of about 6%, lower than the previous target of 8%. Supply chain and transportation pressures in 2022 squeezed profits in all walks of life. Although rising inflation has led to increased sales and consumers have been forced to spend more money on the same goods, profits have not risen accordingly.

Editor ✎Estella/

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