Target Revenue Dropped 3.1% in Q1
Target Corp. execs aren’t happy with the company’s latest financial performance, and neither is Wall Street.
On Wednesday morning, the Minneapolis-based retailer reported that its total revenue dropped 3.1% to $24.5 billion in the first quarter of the year. Net income, meanwhile, also declined 0.8% to $942 million.
Comparable sales, a closely watched metric in the retail industry comparing year-over-year sales at individual locations, dropped 3.7% in the quarter, which Target said was “in line with expectations.”
CNBC reported this morning that this marked the first time since November 2022 that the company missed earning expectations. Despite this, Target chair and chief executive Brian Cornell maintained that the company is “on the right track.”
“While we’re not yet satisfied with our current top line performance and we’re far short where we expect to operate over time, we’ve seen a sustained improvement in multiple business drivers over the last several quarters,” Cornell told analysts in a Wednesday morning call.
Cornell and other execs said the company has plans to win over consumers. They pointed back to Target’s announcement this week that the retailer will lower prices on as many as 5,000 goods, largely pantry staples. Christina Hennington, Target executive VP and chief growth officer, said the company “took a hard look at some of the most popular products from last year’s summer assortment and reduced retails on a wide range of items.”
Hennington also reported growth in the company’s Target Circle rewards program, which added 1 million more members during the first quarter.
Cornell noted that “business trends continue to reflect a normalization in spending patterns that first emerged more than two years ago, a pattern where consumers are remixing their spending back into services and entertainment outside of their homes after curtailing those activities during the pandemic.”
Customers are spending less and visiting Target less frequently. CFO and COO Brian Fiddelke said that the average transaction price fell by 1.9% “as consumers continue to spend cautiously, particularly in discretionary categories.” Store traffic also fell by 1.9%.
