By - Team Kalkine Media
- Target Corporation’s (NYSE: TGT) Q1 net profit skids 52% to US$1.01 billion.
- Target’s shares plummeted 26% following a poor earnings report.
- Lowe's Companies, Inc.’s (NYSE: LOW) first-quarter FY-22 comparable sales decreased 4.0% from the year-ago quarter.
Rising inflation, supply chain disruption, and turmoil in the global economy are largely impacting the earnings of companies worldwide.
Here, we look at two major US companies that have reported their Q1 2022 results on Wednesday - Target Corporation and Lowe’s Companies Inc.-
Target Corporation (NYSE: TGT) reported its Q1 FY 2022 financial results Wednesday, showing its quarterly profit shrinking to half compared to the previous year.
The eighth-largest retailer in the US warned of a bigger margin hit in 2022 due to surging fuel and freight costs.
Shares of Minneapolis-based Target Corporation tanked 26% after the discouraging results. Target’s earnings come a day after rival Walmart Inc.’s (NYSE: WMT) annual cut in profits. However, both the retailers posted quarterly sales above expectations.
Over 95% of Target's first-quarter sales came from its stores.
The Q1 GAAP earnings per share (EPS) of the company was US$2.16, a fall of 48.2% from US$4.17 in 2021.
Target Corporation has lowered its expected annual operating margins to around 6% versus an earlier outlook of 8% or higher.
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Lowe’s reported net earnings of US$2.3 billion, up 0.51% YoY, on Wednesday for the first quarter of fiscal 2022. The company said that its overall same-store sales plunged 4% during the period. It expected a shrink of 2.5%.
Below par spring products sales of the FORTUNE 50 home improvement company wiped out US$350 million off its revenue.
The total sales of the company for the first quarter were US$23.7 billion, which is down from US$24.4 billion in the year-ago quarter.
LOW’s Q1 FY-2022 diluted earnings per share (EPS) remained at US$3.51. It was US$3.21 in the first quarter of 2021.
The rising inflation and hike in interest rates affected the home improvement company’s results.
Target’s results clearly indicate that there would be no immediate respite for US retailers from rising inflation. On the other hand, Lowe’s, which reaffirmed its annual forecasts, saw its shares tumble 2% in early trading.