Target Corp’s Q1 profit dips, Lowe’s net earnings touch US$2.3 bn

May 18, 2022 12:34 PM PDT | By Team Kalkine Media

Target Corp’s Q1 profit dips, Lowe’s net earnings touch US$2.3 bn — Image source: © 1000words | Megapixl.com

Target Corporation (NYSE:TGT):

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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Also Read: WMT stock drops 10% on weak earnings, HD rises on positive guidance

Lowe's Companies, Inc. (NYSE:LOW):

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.

Bottom Line:

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.

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