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May 03, 2025
Target Q1 2025 Earnings Report
Target reported lower revenue and comparable sales in Q1 2025, while EPS increased due to a credit card litigation settlement.
Key Takeaways
Target saw a 2.8% drop in revenue and a 3.8% decline in comparable sales in Q1 2025. However, GAAP EPS rose to $2.27, bolstered by a $593M litigation settlement. Digital sales were a bright spot, led by strong growth in same-day delivery.
Revenue fell to $23.8B, down 2.8% from last year.
GAAP EPS increased to $2.27, driven by a $593M one-time gain.
Digital sales rose 4.7%, with over 35% growth in same-day delivery.
Comparable store sales dropped 5.7%, while transactions decreased 2.4%.
Revenue by Segment
Forward Guidance
Target expects a low-single digit decline in sales for FY2025, with GAAP EPS of $8.00 to $10.00 and Adjusted EPS of $7.00 to $9.00.
Positive Outlook
- Launch of acceleration office to drive strategic execution.
- Strong digital performance and infrastructure.
- Successful designer collaboration with kate spade.
- Operational improvements including SG&A cost discipline.
- Improved operating income margin from litigation benefit.
Challenges Ahead
- Overall revenue and comparable sales declined.
- Higher markdowns impacted gross margin.
- Physical store traffic and transactions declined.
- Effective tax rate rose due to discrete expenses.
- Inventory and accounts payable pressures affected cash flow.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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