Target's Revenue Reaches Over 26B Dollars in Second Quarter 2022; Brian Cornell Details

Rightsizing is on the brain for Target as the retailer implements long-range inventory goals across its operations. In addition, Target released its second quarter financial results, revealing a 3.5 percent revenue increase to $26 billion, reflecting total sales growth of 3.3 percent.

"I'm really pleased with the underlying performance of our business, which continues to grow traffic and sales while delivering broad-based unit-share gains in a very challenging environment," said Brian Cornell, Chairman and Chief Executive Officer. "I want to thank our team for their tireless work to deliver on the inventory rightsizing goals we announced in June. While these inventory actions put significant pressure on our near-term profitability, we're confident this was the right long-term decision in support of our guests, our team, and our business. Looking ahead, the team is energized and ready to serve our guests in the back half of the year, with a safe, clean, uncluttered shopping experience, compelling value across every category, and a fresh assortment to serve our guests' wants and needs."

According to a press release, these financial results reflected continued sales and traffic growth, and profit pressure driven primarily by the company's inventory reduction efforts. As a result of this strategy, Target was able to reduce its inventory exposure in discretionary categories while investing in rapidly-growing frequency categories. Additionally, fall season receipts in discretionary categories were reduced by more than $1.5 billion.

Some other highlights from the report include:

• Comparable sales grew 2.6 percent, on top of 8.9 percent growth last year, reflecting 2.7 percent traffic growth
• Growth reflected continued strength in Food & Beverage, Beauty, and Household Essentials
• Store comparable sales increased 1.3 percent, on top of 8.7 percent growth last year
• Digital comparable sales grew 9.0 percent, following growth of 9.9 percent last year
• Same-day services (Order Pickup, Drive Up, and Shipt) grew nearly 11 percent this year, led by Drive Up, which grew in the mid-teens on top of more than 80 percent last year
• Operating margin rate of 1.2 percent reflected gross margin pressure from actions to reduce excess inventory as well as higher freight and transportation costs

Read the rest of the financial report here.

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