Plan supports continued growth by providing greater
flexibility to serve guests.
Company updates 2022 financial guidance.
MINNEAPOLIS, June 7, 2022
/PRNewswire/ -- Target Corporation (NYSE: TGT) today announced a
set of actions to right-size its inventory for the balance of the
year and create additional flexibility to focus on serving guests
in a rapidly changing environment. These actions are intended to
further build on the Company's record of growth and market-share
The Company is planning several actions in the second quarter,
including additional markdowns, removing excess inventory and
canceling orders. The action plan also includes the addition of
incremental holding capacity near U.S. ports to add flexibility and
speed in the portions of the supply chain most affected by external
volatility; pricing actions to address the impact of unusually high
transportation and fuel costs; and working with suppliers to
shorten distances and lead times in the supply chain.
Additionally, the Company is further accelerating work that's
already in flight, including rapid revisions to sales forecasts,
promotional plans and cost expectations by category. Specifically,
the Company is planning for continued strength in frequency
categories like Food & Beverage, Household Essentials and
Beauty, and is planning more conservatively in discretionary
categories like Home, where trends have changed rapidly since the
beginning of the year. The Company is also pursuing aggressive
options to control costs, including ongoing work with vendors to
help offset inflationary pressures, driving continued operating
efficiencies, and reducing costs while preserving a strong guest
experience. Finally, the Company continues to build additional
capacity in the Company's upstream supply chain to support its
future growth by adding five distribution centers over the next two
All of the actions announced today are the result of the
Company's ongoing assessment of current industry performance, the
operating environment and consumer trends.
"Target's business continues to generate healthy increases in
traffic and sales, despite sustained volatility in the macro
environment, including shifting consumer buying patterns and
rapidly changing operating conditions. Since we reported our first
quarter results, we have continued to monitor external conditions
and have determined the necessary actions to remain nimble in the
current environment. The additional steps we are announcing
today will ensure that we deliver for our guests while driving
further growth. While these decisions will result in additional
costs in the second quarter, we're confident this rapid response
will pay off for our business and our shareholders over time,
resulting in improved profitability in the second half of the year
and beyond," said Brian Cornell,
chairman and chief executive officer of Target Corporation.
In light of the decisions announced today, and based on the
Company's current expectations for the economy and consumer
environment, Target now expects its second-quarter operating margin
rate will be in a range around 2%. For the back half of the year,
Target now expects an operating margin rate in a range around 6%, a
rate that would exceed the Company's average Fall season
performance in the years leading up to the pandemic.
The company continues to expect full-year revenue growth in the
low- to mid-single digit range, and expects to maintain or gain
market share in 2022.
Statements in this release regarding planned pricing, cost and
operational actions and expectations regarding full year revenue
growth and market share, operating margin rates in the second
quarter and back half of the year, and improved profitability in
the second half of 2022 and beyond, are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements are subject to risks and uncertainties
which could cause the Company's actions to differ materially.
These risks and uncertainties include the possibility of
further shifts of consumer demand away from the Company's higher
margin discretionary categories and the risks and uncertainties
described in Item 1A of the Company's Form 10-K for the fiscal year
ended January 29, 2022.
Forward-looking statements speak only as of the date they are made,
and the Company does not undertake any obligation to update any
Corporation (NYSE: TGT) serves guests at nearly 2,000 stores and at
Target.com, with the purpose of helping all families discover the
joy of everyday life. Since 1946, Target has given 5% of its profit
to communities, which today equals millions of dollars a week. For
the latest store count or more information, visit Target.com/Press
Center. For a behind-the-scenes look at Target, visit
Target.com/abullseyeview or follow @TargetNews on Twitter.
View original content to download
SOURCE Target Corporation