Target Profit Rises By 12% In Q4 Of 2021

Target pushed through headwinds — from inflation to congested ports — to deliver solid results for the three-month period that included the crucial holiday shopping season, Anne D’Innocenzio reported for the Associated Press (AP).

Photo Insert: Target Store, Manchester CT

Fourth-quarter profit rose nearly 12%, sales increased 9.4% and the Minneapolis retailer on Tuesday released an upbeat revenue outlook for 2022. Retailers are facing rising costs for everything from labor to shipping as supply chain backups hit companies worldwide.

Target, because of its size, was able to charter vessels and fill its shelves ahead of the holiday shipping crunch.

Yet, Target was not unscathed and cost pressures from 2021 are carrying over into this year. Gross margins fell from 26.8% during the fourth quarter of 2020, to 25.7% in the most recent quarter.

Target said Tuesday, however, that margins in the first quarter will be lower than last year. That did not scare investors who drove shares up more than 12% before the opening bell.

Target’s advantage competing against massive rivals can be found in its 1,900 stores, which have become the equivalent of Amazon’s “fulfillment centers.”

Digital sales growth reached nearly $13 billion in 2021 and more than 95% of Target’s fourth-quarter sales were fulfilled at its stores. For the quarter, Target registered an increase of 9.2% in digital sales for the quarter.

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