(AOF) – In the second quarter of 2022, ended July 30, the American discounter Target achieved adjusted earnings per share of 39 cents, down sharply (- 89.2%) compared to the 3.64 dollars posted at the same time. period last year. It thus missed the FactSet consensus of 79 cents per share. Net income fell to $183 million from $1.82 billion a year earlier. Gross margin contracted from 30.4% to 21.5%.
Over the period, total revenue nevertheless rose 3.5% to $26.04 billion, beating the FactSet consensus of $26.03 billion, while same-store sales growth of 2.6% was below market expectations, which had forecast a rise of 2.8%.
The company confirmed its forecast for fiscal 2022 revenue growth in the single-digit percentage range, while the current FactSet consensus of $109.83 billion implies that growth will be 3.6%. .
These lackluster results are due to the fact that the low-cost distributor applied higher shrinkage rates, which notably led to a drop in gross margins.
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big concerns
According to the Federation of specialized trade, Procos, activity from January to May is very significantly down compared to the same period in 2019, at – 8.8%. Store traffic in May 2022 remained lower than in May 2019, but the decline was limited to 6.5%, much better than in April (-19.6% compared to April 2019). In a very uncertain context, several elements weigh on the profitability of companies, in particular the increase in the cost of electricity and the indexation of rents, even if the composition of the ILC (commercial rent index) has been modified. Previously it was composed of 50% inflation, 25% construction cost index and 25% change in retail turnover. From now on, it will only take into account inflation and the cost of construction because the previous formula included sales made by the ‘pure players’ of the Net, which increased the rents of physical stores.