By Nathalie Voit
Target released its fourth-quarter and full-year 2021 earnings, prompting sales of its stock to jump over 16% to $229.19 on March 3.
The stock’s surge was brought on by the retailer’s bright fiscal-year outlook and impressive fourth-quarter results for the period ending on Jan. 29, which easily beat analyst estimates.
Excluding items, Target reported adjusted earnings of $3.19 per share on revenue of $31 billion. Refinitiv’s projected estimate was $2.86 per share on revenue of $31.39 billion, CNBC said. Economists polled by FactSet similarly underestimated the retailer’s fourth-quarter performance, capping expected earnings for the holiday quarter to $2.84 a share, Barron’s said.
Adjusted full-year fiscal earnings were $13.56 per share, compared with $9.42 in 2020.
The Minneapolis-based company said that net income for Q4 increased around 12% to $1.54 billion from $1.38 billion a year earlier. Target earned $3.21 per share in Q4, compared with $2.73 in 2020.
Earnings per share were $14.10 for the full fiscal year, compared with $8.64 twelve months ago.
Despite ongoing supply-chain woes, sales grew about 9% in the fourth quarter. This was in contrast to comparable sales growth of 20.5% one year earlier, Target said.
The retailer issued an optimistic full-year fiscal outlook, expecting low- to mid-single-digit revenue growth in 2022. Sales in 2021 totaled 13.2% to $104.6 billion, for reference.
The company expects an operating margin of about 8% or higher for fiscal 2022.
“Strong fiscal 2022 guidance and an updated long-term algorithm should give investors confidence in management’s strategic vision and ability to execute,” RBC analyst Steven Shemesh said regarding Target’s financial results, according to Barron’s.
In a company announcement released on Feb. 28, the retailer also said it would be raising its minimum wage to $15 an hour and expanding healthcare benefits for its workers. New starting wages for Target employees will now range from $15 to $24 an hour, Target said.
“Our strong fourth-quarter performance capped off a year of record growth in 2021, reinforcing the durability of our business model and our confidence in long-term profitable growth,” said chairman and CEO of Target Brian Cornell. “As we look ahead, we’ll keep investing and delivering on all that has earned the loyalty and trust of our guests; that starts with our outstanding team and includes continued differentiation through affordability, assortment, ease, and convenience.”
The news comes amid a flurry of success for the business, which has managed to kick off its e-commerce presence with innovative services such as Same Day Delivery, Drive Up, and Order Pickup. Target’s same-day services allow customers to easily obtain online purchases made at home, paving the way for continuous growth in the company’s digital sector.
Target shares settled to about $223.84 as of 4:30 p.m. Thursday.
