What happened
Shares of Target (TGT 0.67%) jumped 9.9% on Tuesday, after the department store chain delivered stronger-than-expected fourth-quarter results.
So what
Target's revenue rose 9.4% year over year to $31 billion, driven by an 8.1% rise in traffic to its stores. Notably, the retailer's comparable-store sales increased an additional 8.9%, on top of the 20.5% comp growth it achieved in the year-ago quarter.
"Our strong fourth-quarter performance capped off a year of record growth in 2021, reinforcing the durability of our business model and our confidence in long-term profitable growth," CEO Brian Cornell said in a press release.
Image source: Getty Images.
Better still, Target is becoming more profitable as it scales its revenue base. Its operating margin improved to 6.8%, up from 6.5% in the prior-year period. That's particularly impressive considering the higher costs the company faced, a result of industrywide supply chain constraints.
All told, Target's adjusted earnings per share leaped 19% to $3.19. That was well above the $2.86 in per-share profits Wall Street projected.
Now what
Management expects Target's revenue to grow by "low- to mid-single-digit" percentages in fiscal 2022. The company also anticipates high-single-digit growth in adjusted earnings per share, even as it boosts spending on pay raises and additional healthcare benefits for its employees.
"As we look ahead, we'll keep investing and delivering on all that has earned the loyalty and trust of our guests; that starts with our outstanding team and includes continued differentiation through affordability, assortment, ease, and convenience."
