Target: Q1 profit way off target
(CercleFinance.com) - Target has reported a sharper-than-expected decline in Q1 profit on Wednesday, hit by inflationary pressures and an increased use of promotions.
This morning the US retailer reported net profit of just over 1 billion dollars for Q1 to end-April, less than half the 2.1 billion dollars reported a year ago.
Q1 EPS reached 2.16 dollars, compared with 4.17 dollars a year ago and the consensus of 3.06 dollars.
While LFL sales rose by 3.3% in Q1, the group's operating margin slumped to 5.3% from 9.8% a year ago, due to an increase in promotional operations to clear unsold stock in non-food departments.
The Minneapolis-based group also cites the impact of rising freight costs, supply chain disruptions and wage increases.
The situation is not expected to improve in the immediate future, as Target still expects an operating margin of around 5.3% for the current quarter.
The share price is down over 22% in pre-market trading on Wednesday as a result of these announcements - it could well be in for a rough ride today.
Copyright (c) 2022 CercleFinance.com. All rights reserved.
This morning the US retailer reported net profit of just over 1 billion dollars for Q1 to end-April, less than half the 2.1 billion dollars reported a year ago.
Q1 EPS reached 2.16 dollars, compared with 4.17 dollars a year ago and the consensus of 3.06 dollars.
While LFL sales rose by 3.3% in Q1, the group's operating margin slumped to 5.3% from 9.8% a year ago, due to an increase in promotional operations to clear unsold stock in non-food departments.
The Minneapolis-based group also cites the impact of rising freight costs, supply chain disruptions and wage increases.
The situation is not expected to improve in the immediate future, as Target still expects an operating margin of around 5.3% for the current quarter.
The share price is down over 22% in pre-market trading on Wednesday as a result of these announcements - it could well be in for a rough ride today.
Copyright (c) 2022 CercleFinance.com. All rights reserved.