Target Corporation Reports Fourth Quarter and Full-Year 2024 Earnings

Core Insights - Target Corporation reported a decline in both fourth-quarter and full-year earnings per share (EPS) for fiscal 2024, with fourth-quarter GAAP and Adjusted EPS at $2.41 compared to $2.98 in 2023, and full-year EPS at $8.86 compared to $8.94 in the prior year [2][10] Financial Performance - Fourth-quarter net sales were $30.9 billion, a decrease of 3.1% compared to the same quarter in 2023, which had an additional week of sales [6][30] - Full-year net sales decreased by 0.8% to $106.6 billion from $107.4 billion, with comparable sales showing a slight increase of 0.1% [7][10] - The company's total comparable sales increased by 1.5% in the fourth quarter, driven by an 8.7% increase in digital sales, while comparable store sales declined by 0.5% [6][10] Operating Results - Operating income for the fourth quarter was $1.5 billion, down 21.3% from $1.9 billion in 2023, resulting in an operating income margin of 4.7% compared to 5.8% in the previous year [6][8] - Full-year operating income was $5.6 billion, a decline of 2.5% from $5.7 billion in 2023, with a full-year gross margin rate of 28.2%, up from 27.5% in the prior year [9][10] Sales Metrics - The company experienced strong performance in categories such as Beauty, Apparel, Entertainment, Sporting Goods, and Toys, contributing to better-than-expected sales and profitability [3] - Digital comparable sales growth of 8.7% in the fourth quarter indicates a shift towards online shopping, with same-day delivery services growing over 25% compared to the previous year [10] Guidance and Expectations - For fiscal 2025, the company anticipates profit pressure in the first quarter due to consumer uncertainty and a decline in February net sales, but expects a moderation in trends as weather improves [4][5] - The company projects full-year net sales growth around 1% and GAAP and Adjusted EPS guidance between $8.80 and $9.80 [11][38] Capital Deployment - Target paid dividends of $513 million in the fourth quarter, reflecting a 1.8% increase in the dividend per share compared to the previous year [15] - The company repurchased $506 million of its shares in the fourth quarter, with approximately $8.7 billion remaining under the repurchase program [16] Return on Invested Capital - The after-tax return on invested capital (ROIC) for the trailing twelve months was 15.4%, down from 16.1% in the previous year, primarily due to lower profitability [17][44]