Target Continues Success in Q1 2022

Target, Store Brands’ 2021 Retailer of the Year, reported another strong performance for Q1 2022, adding to its hot streak over the last two years.

First covered by Store Brands’ sister publication Progressive Grocer, Target saw comparable sales grow 3.3%, on top of 22.9% growth last year. Some highlights were comparable sales growth reflecting traffic growth of 3.9%, digital comparable sales growing 3.2%, following growth of 50.2% last year and same-day services (order pick-up, drive-up and Shipt) grew 8% this year, led by drive-up, which grew in the mid-teens on top of more than 120% last year.

Target has continued to expand its private label and exclusive offerings, most recently announcing the Tabitha Brown for Target collection. 

"Our first-quarter results mark Target's 20th-consecutive quarter of sales growth, with comp sales growing more than 3% on top of a 23% increase one year ago," said Brian Cornell, chairman and CEO of Target. "Guests continue to depend on Target for our broad and affordable product assortment, as reflected in Q1 guest traffic growth of nearly 4%. Throughout the quarter, we faced unexpectedly high costs, driven by a number of factors, resulting in profitability that came in well below our expectations, and well below where we expect to operate over time. Despite these near-term challenges, our team remains passionately dedicated to our guests and serving their needs, giving us continued confidence in our long-term financial algorithm, which anticipates mid-single digit revenue growth, and an operating margin rate of 8% or higher over time."

During the first quarter, total revenue of $25.2 billion grew 4.0% compared with last year, reflecting total sales growth of 4.0% and a 6.7% increase in other revenue. Operating income was $1.3 billion, down 43.3% from $2.4 billion in 2021, driven primarily by a decline in the company's gross margin rate. First quarter gross margin rate was 25.7%, compared with 30.0% in 2021.

Minneapolis-based Target operates nearly 2,000 locations in North America.